Speculative Company

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DEFINITION of 'Speculative Company'

A company with a significant percentage of its assets tied up in projects with uncertain returns. A speculative company participates in projects with high probability of failure. However, should a project succeed, the returns can be very large.


The stock of speculative companies is not necessarily classified as speculative stock, however, since the expected return of an established speculative company's stock (such as Exxon Mobil Corp or Shell Canada) can be reasonably estimated.

INVESTOPEDIA EXPLAINS 'Speculative Company'

Energy companies are an example of a speculative company, since they are continuously committing a significant percentage of their assets to exploration projects. These companies often experience many failures before a project succeeds. However, should they find a new source of oil or natural gas, the potential returns are huge.

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    Speculation and gambling are two different actions used to increase wealth. However, the two are very different in the world ... Read Full Answer >>
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    Speculation methods, such as short selling, futures contracts and put options, offer investors a way to make money from a ... Read Full Answer >>
  3. How can an investor profit from a decline in the aerospace sector?

    Several forms of speculation enable investors to profit from a decline in the aerospace sector. Short selling aerospace stock ... Read Full Answer >>
  4. What caused the stock market crash of 1929 that preceded The Great Depression?

    The stock market crash of 1929 was due to a market that was overbought, overvalued and excessively bullish, rising even as ... Read Full Answer >>
  5. What are the biggest risks involved with financial spread betting?

    Financial spread betting is a type of financial derivatives product used to speculate the price movements of a security. ... Read Full Answer >>
  6. How did Bernard Baruch attain his wealth?

    Bernard Baruch obtained his fortune by investing in profitable stocks on Wall Street. Baruch is known as a legendary stock ... Read Full Answer >>
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