As the COVID-19 pandemic began to unfold in early March, it quickly became clear that the crisis would act as a "poison pill" that would sharply reduce shareholder activism in the spring. Initially, many activists were preoccupied with their own survival and/or attracting new capital rather than launching new campaigns. Additionally, it became difficult to obtain shareholder support for public activist campaigns at a time when boards and management teams were focused on managing through the immediate crisis.

In addition, conditions were ripe for a surge in adoptions of poison pills, formally known as shareholder rights plans. For many companies, responding to stock prices that had collapsed 50% or more in a matter of days was a component of managing through the crisis. At the same time, equity trading volumes had increased and thus an activist or potential hostile acquirer was able to accumulate a large stock position quickly. Additionally, the increased volatility and general upheaval in the equity markets resulted in atypical trading patterns (and other behaviors), diminishing the effectiveness of traditional stock watch methods to identify activist accumulations that rely on pattern recognition.

In the first few weeks of the crisis, more than a dozen pills were adopted. Shortly thereafter, proxy adviser firms Institutional Shareholder Services (ISS) and Glass Lewis both published guidance indicating greater acceptance of short-duration poison pills in the current circumstances. For example, ISS's April 8 guidance specifically noted that "[a] severe stock price decline as a result of the COVID-19 pandemic is likely to be considered valid justification in most cases for adopting a [one-year] pill." As a result, approximately 50 companies adopted "poison pills" by mid-May. To further put this number in perspective, only 25 S&P 1500 companies had a poison pill in place at the end of 2019, according to FactSet.