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Lobster Trap

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Lobster Trap
A strategy used by a target firm to prevent a hostile takeover. In a lobster trap, the company passes a provision preventing anyone with more than 10% ownership from converting convertible securities into voting stock.

Notes:
Examples of convertible securities include convertible bonds, convertible preferred stock, and warrants.


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Because migrating right whales travel through the Gulf of Maine in spring mad fall, reducing the area's lobster traps at those times would make the passage safer, says Worm.
The colorful buoys of the lobster traps adorn a building at the Hotel Pemaquid, above.
Non-Native fishers in the area demanded that many of the lobster traps be removed and the Department of Fisheries and Oceans were forcibly doing so.
 
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