Asteroid Event

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Category Killer

    Large companies that put less efficient and highly specialized ...
  2. Killer Application

    A software package that is novel and desirable enough to persuade ...
  3. Product Recall

    The process of retrieving defective goods from consumers and ...
  4. Offensive Competitive Strategy

    A type of corporate strategy that consists of actively trying ...
  5. Bid Wanted

    An announcement by an investor who holds a security that he or ...
  6. Hindsight Bias

    A psychological phenomenon in which past events seem to be more ...
Related Articles
  1. Markets

    Great Company Or Growing Industry?

  2. Personal Finance

    A History Of U.S. Monopolies

  3. Personal Finance

    Antitrust Defined

  4. Mutual Funds & ETFs

    How can I get a mutual fund prospectus?

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center