Greenmail is the practice of buying enough shares in a company to threaten a hostile takeover so that the target company will instead repurchase its shares at a premium. The goal of greenmailing is to make money by buying low and selling high. It's an aggressive tactic, but it can be profitable if used correctly.There are two main types of greenmail: friendly and hostile. Friendly greenmail happens when the target company agrees to buy back its own shares from the would-be acquirer at a premium price. Hostile greenmail happens when the target company doesn't want to sell, so the would-be acquirer resorts to threats or even violence in order to get what he wants.Most people think of GreenMail as an evil thing because it's often used as way for rich people and corporations to take advantage of smaller companies, but there is no denying that it can be profitable for those who know how to use it correctly.
