Poison pills are a defense strategy used by the directors of a public company to prevent activist investors, competitors, or other would-be acquirers from taking control of the company. There are several types of poison pills—the most common type is the flip-in, executed by issuing more shares to all shareholders except the offending acquirer, thus lowering the amount of control they have or could obtain.

Another goal is to force the entity trying to acquire the company to negotiate with the company's board for a buyout price.