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Lobster Trap

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Dictionary Says

Definition of '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.
Investopedia Says

Investopedia explains 'Lobster Trap'

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

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