DEFINITION of Shark Watcher
A shark watcher is a firm specializing in the early detection of hostile takeovers. One method of hostile takeover is through accumulating a majority share of a publicly traded company's outstanding stock. The shark watcher is hired by a firm who is concerned about the possibility of such a takeover. The shark watcher monitor's aspects of a firm's trading such as who is accumulating shares and the quantity accumulated. In addition, a shark watcher's primary business is usually the solicitation of proxies for client corporations.
BREAKING DOWN Shark Watcher
A shark watcher monitors trading patterns in a client's stock and attempts to determine who is accumulating shares. This is done in an attempt to detect early attempts at hostile takeovers. A shark watcher can also be hired by a third party who is interested in possible risk arbitrage opportunities that might arise as the result of an attempted takeover.
Example of Shark Watcher
Sesame Brokerage is a publicly traded company. They have a lot of valuable assets. However, their stock price has recently been depressed due to macro trends sweeping the industry. They are concerned about being a takeover target. Sesame Brokerage hires Bert and Ernie's Shark Watchers Inc. to monitor trading activiy of Sesame Brokerage's shares on the open market. Shark Watchers Inc. will track firms that acquire shares of Sesame Brokerage and alert Sesame Brokerage to any possible takeover threats.