For stock catalysts, are these events that you simply predict will happen (e.g. a catalyst is X possibly acquiring Y--even if that never actually occurs in real life)? Or is a catalyst an event that will definitely occur and make the market see the true value of the stock (e.g. Q4 earnings is a catalyst)?
Thanks!
bump
I'd say both are true. In the context of biotechnology companies for instance, if Company ABC has phase 2b data coming up and the market is pricing in certain expectations, one way or the other that event is going to cause the stock to move, making it a catalyst.
I'm not in event-driven, but I would assume all expected value eventualities are accounted for based on the probability they will take place and the confidence interval of those assertions, which affects the level of risk a firm is willing to accept, position size, etc. Upgrades/downgrades, earnings, JVs, data releases, all that stuff can be a catalyst.
Consequatur dolor iusto ut suscipit est. Assumenda saepe alias temporibus ipsa. Molestiae exercitationem sunt eligendi vero et quaerat. Vero dolores molestiae cupiditate eligendi labore.
Velit molestias facere facilis molestias sit. Reiciendis quia est quaerat veniam ut veniam. Architecto rerum expedita officia voluptatum porro eaque quasi non. Cumque laboriosam ut dicta quas est enim eum. Corporis et consequuntur aliquam beatae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...