In The Penalty Box

AAA

DEFINITION of 'In The Penalty Box'

A phrase referring to a company whose stock has plummeted with no rebound in sight. A company in the penalty box is often one that has received some bad news, ensuring the future lethargy of its stock. An example of this is a drug company with a key drug that doesn't get FDA approval. These types of companies will often stay in the penalty box for a long period of time.



INVESTOPEDIA EXPLAINS 'In The Penalty Box'

The term "penalty box" comes from the sport of hockey. In hockey, when a player commits a rules infraction, he or she is put in the penalty box near the player's bench. For a designated period of time, typically two minutes, a player is out of action and his or her team must play shorthanded. As a result, most teams go on the defensive and aim only to stay even (prevent the opposition from scoring versus scoring themselves).

RELATED TERMS
  1. Analyst

    A financial professional who has expertise in evaluating investments ...
  2. Hockey Stick Bidding

    An anti-competitive bidding practice in which a market participant ...
  3. Fire Sale

    Selling goods or assets at heavily discounted prices. Fire sale ...
  4. Undervalued

    A financial security or other type of investment that is selling ...
  5. Take A Bath

    A slang term referring to the situation of an investor who has ...
  6. Turnaround

    The financial recovery of a company that has been performing ...
Related Articles
  1. Earnings: Quality Means Everything
    Investing

    Earnings: Quality Means Everything

  2. What happens to the fines collected ...
    Investing

    What happens to the fines collected ...

  3. Technical Analysis Strategies for Beginners
    Trading Strategies

    Technical Analysis Strategies for Beginners

  4. What Does The Dow Jones Industrial Average ...
    Investing Basics

    What Does The Dow Jones Industrial Average ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center