Shares of the co-working company WeWork (NYSE: WE) fell more than 9% on Monday after the company on Friday adopted a tax asset preservation plan, which is also referred to as a "poison pill."

WeWork is adopting this plan because it wants to preserve its right to use prior losses to offset income taxes in the future. At the end of 2021, WeWork had roughly $6.9 billion of federal net operating loss (NOLs) carryforwards and $6.6 billion of state NOLs. But these can't be used in the future if there is an ownership change.

According to WeWork, an ownership change would occur if shareholders who already own 5% of outstanding shares bought an additional 50 percentage points of common shares over a rolling three-year period.

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Source Fool.com