Torpedo Stock

AAA

DEFINITION of 'Torpedo Stock'

A stock that has fallen substantially in value and that looks like it will continue to fall in value in the foreseeable future. This name refers to this type of stock's similarity to a battleship after it has been struck by a torpedo: it goes down fast and continues to sink until hits the bottom.

INVESTOPEDIA EXPLAINS 'Torpedo Stock'

A change in a business's underlying fundamentals can turn a company's stock into a torpedo stock. For example, investors see earnings as a good indicator of a business' success, as even a gradual rate of earnings growth indicates that a business is doing well. However, quarter after quarter of declining earnings with no end in sight can be enough to cause investors to "jump ship" as a stock's price starts to plummet.

RELATED TERMS
  1. Air Pocket Stock

    A stock that experiences a sudden drop, similar to a plane hitting ...
  2. Falling Knife

    A slang phrase for a security or industry in which the current ...
  3. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of ...
  4. In The Penalty Box

    A phrase referring to a company whose stock has plummeted with ...
  5. Bloodletting

    A period marked by severe investing losses. Bloodletting may ...
  6. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
Related Articles
  1. Investing Basics

    Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  2. Active Trading

    The Dead Cat Bounce: A Bear In Bull's Clothing?

    Make sure you know the difference between a change in market outlook and short-term recovery.
  3. Investing

    Turnaround Stocks: U-Turn To High Returns

    Find out which catalysts can turn struggling stocks around to create a tidy profit.
  4. Options & Futures

    Prices Plunging? Buy A Put!

    You can make money on a falling stock. Find out how going long on a put can lead to profits.
  5. Chart Advisor

    4 Bullish Flag Patterns You Should Trade Now

    Here are four stocks with flag patterns, highlighting the various ways to trade this chart pattern.
  6. Stock Analysis

    Cheaper Solar Power Gets Some Major Backers

    While solar hasn’t lived up its potential, the times are changing. New investment has surged. For investors, this could be the time to buy solar stocks.
  7. Entrepreneurship

    Which is The Best Bank for Your Buck, BAC or MS?

    One things stands out between these financial services giants when it comes to investing in them.
  8. Chart Advisor

    These Transportation Stocks Are at a Crossroads

    These shipping and railroad stocks are testing resistance. A break above signals an emerging uptrend; a break lower, a continuation of the downtrend.
  9. Investing

    Are These 2015's Most-Promising Small-Cap Stocks?

    At least one of these small-caps should spike in 2015.
  10. Mutual Funds & ETFs

    Are These the Top Inverse ETFs of 2015?

    Short shy? Here's a list of top inverse ETFs to help you profit from a decline in the value of an index or group of stocks.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center