A year ago technology companies didn't have to worry about takeovers. But the corollary is also true.
Undervalued companies are susceptible to takeover.
About 1,600 U.S. firms have poison pills, which make hostile bids prohibitively expensive by letting targeted firms give more shares to existing shareholders. While most fledgling technology concerns have not introduced poison pills, the situation is fast changing. That is not happy news for some economists and institutional investors who argue that pills, often adopted without shareholder vote, make companies takeover-proof and allow incompetent executives to remain fat, lazy and indifferent. Among them, Web portal Yahoo, Web consulting group Scient, Internet infrastructure software maker Inktomi, handheld computer maker Palm and computer maker Gateway. None of the companies' CFOs responded to calls for comment.