Shark Repellent

So yeah...for Sharknado 11: the Shmooping, we just gave away the penultimate scene.

In the financial world, however, shark repellent is a fancy, $5 term for companies trying to fend off corporate raiding sharks. Companies deploy all kinds of tricks to dilute their shares, change their business dynamics, create friction at the board level, and generally make themselves unappetizing to the sharks hoping to eat them for “x” and sell them for “2x” four years later. You’ll hear of specific shark repellents like poison pills and partner killer bees, i.e. law firms that specialize in hostile takeover defense.

The notion of a company currently trading at $40 getting a hostile takeover bid for $52/share, and somehow that being perceived as “just awful” and “terrible” and “bad”...is strange to many in the Wall Street investing public. If someone is really willing and able to pay a big premium to buy a given company, then why shouldn’t it be sold to that new owner? Companies generally exist for the financial benefit of the people who own them, i.e. their shareholders...and if the stock market isn’t giving the company a reflectively high value, then why shouldn’t the company sell to someone who will?

The point being that sharks, uh, aren’t always evil.