Stock for which voting powers, preferences, and other rights are decided by the issuing firm’s board of directors after the shares have been sold to subscribers. Thanks to blank stock, the board of directors has the right to classify or reclassify any unissued stock from time to time by determining or altering voting powers, preferences, conversion, restrictions, limitations as to dividends, qualifications, or terms and conditions of redemption, among others.
Blank stock is often considered a defensive tactic against unsolicited takeover bids because it allows the firm, for instance, to issue additional shares to friendly shareholders or shares associated with supervoting rights.
Blank stock is also known as blank check stock.
