Asteroid Event

DEFINITION of 'Asteroid Event'

An event that is sudden and unexpected and cause a drastic change in the eniviroment in which it occurs. An asteroid event will often be disasterous for a company, industry or economy due to its unpredictability and suddeness. Such an event is almost impossible to adequately prepare for and can be thought of as the worst-case scenario.

BREAKING DOWN 'Asteroid Event'

Companies that rely on the creativity of a lone executive board member, or the popularity of a small set of products may experience an asteroid event if that executive were to suddenly leave the company or a new technology makes existing products immediately obsolete.

An example of an asteroid event would be if a drug manufacturer has its income-generating drug pulled from the market after being found to have harmful side effects. Since the sale of the drug is the only thing keeping the company in business, its elimination from the market would make the value of the company's stock plummet.