Event Driven Strategy
Definition of 'Event Driven Strategy'A strategy, adopted by hedge fund managers, that attempts to take advantage of events such as mergers and restructurings that can result in the short-term mispricing of a company's stock. An event-driven strategy focuses on exploiting the tendency of the equities of companies in a time of change to drop in price. |
|
Investopedia explains 'Event Driven Strategy'Investors often become concerned when a company is going through a corporate reorganization, restructuring, merger, acquisition or other major event. This can lead the stock price to stagnate until investors feel comfortable with its stability again. When a hedge fund manager or other event-driven strategist finds a potential investment, he or she will examine the underlying value of the company and the situation surrounding the event, including potential regulatory pitfalls. If he or she feels positive about the event and the strength of the company, he or she may buy shares to sell later when the price adjusts. |
Related Definitions
Articles Of Interest
-
Hedge Funds: Higher Returns Or Just High Fees?
Discover the advantages and pitfalls of hedge funds and the questions to ask when choosing one. -
Hedge Funds Hunt For Upside, Regardless Of The Market
Hedge funds seek positive absolute returns, and engage in aggressive strategies to make this happen. -
The Basics Of Mergers And Acquisitions
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. -
Arbitrage Squeezes Profit From Market Inefficiency
This influential strategy capitalizes on the relationship between price and liquidity. -
Mergers And Acquisitions: Understanding Takeovers
In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game. -
Quants: The Rocket Scientists Of Wall Street
Blend math, finance and computer skills to command a high - and well deserved - salary. -
Financial Career Options For Professionals
Find out if spreading your wings to try a new career will make you soar or fall flat. -
7 Unconventional Ways Businesses Can Borrow Money
Find out how your business can get the money it needs - even when the bank says "no". -
A Look At CFA Job Opportunities
Being a CFA charterholder can take your career in many different directions. Find out what your option are. -
Warding Off Hostile Takeovers
The purpose of this article is to provide a general overview of hostile corporate takeovers, while highlighting a general course of action against such activity. This article provides basic ...
Free Annual Reports