Greenmail Meaning: Definition, Examples, and Translations
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greenmail
[หษกriหnหmeษชl ]
Definition
business tactic
Greenmail is a financial maneuver involving the purchase of a large number of shares in a company, usually with the intent of pressuring the company or its management. The shareholder may threaten to acquire a controlling interest in the company unless they're bought out at a premium price. This tactic is often seen as a form of blackmail in the financial world, where the 'green' refers to money. It's considered an unethical practice and can lead to legal ramifications.
Synonyms
acquisition pressure, blackmail, extortion.
Examples of usage
- The CEO was concerned about the potential for greenmail from investors.
- Some companies have implemented policies to deter greenmail attempts.
- He made a fortune through greenmail in the 1980s.
- Investors accused the firm of resorting to greenmail to resolve disputes.
Translations
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Origin of 'greenmail'
The term 'greenmail' is a portmanteau of the words 'green' and 'blackmail,' first coined in the financial jargon of the 1980s during a time when hostile takeovers and corporate raiding became common in the United States. In this context, 'green' refers to money, highlighting the financial aspect of the tactic. The practice often involved large investors holding significant shares of a company and demanding a buyout at a premium from the management to avoid potential takeover threats. As public sentiment turned against such aggressive financial tactics, the term came to be associated with unethical behaviors, leading to the current understanding of greenmail as a practice fraught with moral and sometimes legal complications.