Hello YouTube, Todd Ault here, and Welcome to Wall Street Words! Today's Wall Street term is "Anti-Takeover Statute"

Something I'm all too familiar with. Now, let me put you through this a little bit and that is let's say you're a public corporation and you don't want to be taken over. Well, there's actually standard protections built into being incorporated, like in Delaware. In Delaware, they have something called "Delaware 203" (Section 203 of Delaware General Corporation Law), which means you cannot buy more than 15% of that company in the public markets without getting the board of directors approval. If you do that, and I have stupidly done this before, if you buy more than 15 % without board approval, you can't incorporate your business in any way, merge any of your operations with that business for a total of 36 months, unless you get two thirds of the minority interest in the company to approve it. Let me just make it simple, Anti-Takeover Statutes are built into certain corporations like in Missouri and Maryland, California and Nevada, preventing "raiders" or corporate takeover artists from doing something to the company without going through the board of directors or make it really cost-prohibitive. These statues are state laws and they differ in every state, so if you're a takeover artist get a lawyer. Today's word is "Anti-Takeover Statue."

Definition - A set of regulations in a state that will help to prevent or deter a company from attempting to initiate hostile takeovers. These regulations will tend to vary from state to state and they will typically affect only the companies that are incorporated in that state. Even though this statute is intended to restrict predatory takeovers, it sometimes maybe detrimental to shareholders by preventing companies from partaking in profitable or justified takeovers and deterring acquisition-minded firms or individuals from making an offer for the firm's stock.

The 1968 Williams Act also requires public information disclosure. These provisions of the Act were in part a response to perceived takeover abuses in the 1960s, such as “creeping takeovers” and “Saturday night raids” where the bidder quickly gained control of the target shares using all-cash purchases in the market and privately from blockholders. While the stated intention of the Act is to protect target shareholders, a concern for potential bidders is that the mandatory disclosure rules also act to increase the ability of potential rival bidders to compete for the target.

In today's world, knowledge is powerful and I'm here to share my 30+ years of Wall Street experience with you. Wall Street can definitely be intimidating for a lot of people, so I'm super excited to announce our launching of "Wall Street Words."

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