Definition

The practice of buying enough company stock to threaten a takeover, then selling it back to the company at a premium to go away. Corporate extortion wearing a business suit.

Example Usage

The activist investor was attempting greenmail, but the board called their bluff and refused to buy back the shares.

Origin

1980s corporate raider terminology, portmanteau of 'greenback' and 'blackmail'

Fun Fact

Greenmail was so prevalent in the 1980s that Congress eventually passed tax laws to discourage it, though creative financiers still find loopholes.

Source: Corporate finance and mergers & acquisitions terminology

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