A Lobster Trap is an anti-takeover strategy whereby the target
firm passes a provision preventing anyone with more than 10% ownership of
convertible securities (convertible
preferred stock, or warrant) from
transferring these securities to voting stock.
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Cases of Lobster Traps. Examples
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The Concept of a Lobster Trap and An Example
A Lobster Trap is based on the process of acquiring securities from small stock holders and merging them into voting stock so as to prevent rival companies to take over the target firm. The etymology ...