Word of the Day

: December 8, 2014

greenmail

noun GREEN-mail

What It Means

: the practice of buying enough of a company's stock to threaten a hostile takeover and reselling it to the company at a price above market value; also : the money paid for such stock

greenmail in Context

In an astonishing act of greenmail, the investor bought up all available shares of the company and leveraged his sale back to the company at triple the purchase price.

"We arrived in the middle of great turmoil, with the era of greenmail and leveraged buyouts, when both managers and corporate raiders were abusing shareholders horribly." - Nell Minow, interview in USA TODAY, October 20, 2014

Did You Know?

Greenmail is a recent English coinage, but its history spans a millennium. In the Anglo-Saxon historical records for 1086, we find an early use of a word that still survives in Scottish English as mail, meaning "payment" or "rent." The 16th century saw the appearance of the compound blackmail, which was originally a tribute that freebooting chiefs at the Scottish border exacted in exchange for immunity from pillage. In 1862, the U.S. government began printing paper money using green ink, and soon the word green came to suggest money. Finally, in the 1980s, greenmail was coined by combining green and blackmail to describe a particular type of financial piracy.