Maxar Technologies (MAXR) stock closed up 11% on Thursday -- and the reason is "poison."
Five months ago, the space technology company announced it would adopt "a tax benefit preservation plan" designed to preserve the value of its net operating losses and other tax attributes -- calculated at close to $1 billion -- which it could then use to offset the tax bill on any future profits.
Today, Maxar put that plan to a vote, and shareholders representing 88% of the company's voting stock approved it.
As Maxar explained, the tax benefit preservation plan will remain in place until October 5, 2020.
The idea is to discourage an ownership change that might reduce the value of the tax benefits. For the duration of the plan, anyone who tries to acquire beneficial ownership of 4.9 percent or more of Maxar common stock -- or anyone who already owns 4.9%, and tries to buy more -- will trigger a clause permitting all other shareholders to buy one share of Maxar common stock for every share they already own, at a 50 percent discount.
That sounds like great news for anyone who already owns Maxar shares -- and investors certainly reacted today like they thought it was good news. The problem is, this plan will act as a poison pill, discouraging would-be acquirers of Maxar shares from offering to buy the company (or bidding up the shares), without first obtaining a green light from management.
The effect, I fear, will therefore be to only prolong the pain of shareholders who have held Maxar stock through a near-50% drop in price over the past year.