The company's shares have plunged nearly 90 percent from their one-year high, possibly making the company an attractive takeover candidate for a company seeking to buy a massive presence on the Web. However, Yahoo said the rights plan was not "adopted in response to any effort to acquire control of Yahoo."
"The rights plan is designed to deter coercive takeover tactics, including the accumulation of shares in the open market or through private transactions and to prevent an acquirer from gaining control of Yahoo without offering a fair and adequate price and terms to all of Yahoo's stockholders," the company said in a statement.
Yahoo shares closed Thursday at $24.44, well below their 52-week high of $205.62. The company has a market capitalization of about $13 billion, compared with more than $100 billion when its shares peaked at a split-adjusted $237.50 on Jan. 3, 2000.
Under the plan, Yahoo shareholders will have the right to buy "one unit of a share" of preferred stock for $250 if a person or group acquires at least 15 percent of the company's stock. The rights apply to shareholders of record as of March 20, 2001, and expire March 1, 2011.