Event Driven Strategy - Explained
What is an Event-Driven Strategy?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is an Event-Driven Strategy?
A type of investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, restructuring, merger/acquisition, takeover or spinoff is known as an event driven strategy.
There are various methods in which specialists hired by an investor can execute an event driven strategy, while aiming at taking advantage of temporary mispricing in the system.
These specialists analyze effectively taking into consideration among other things,the current regulatory environment, possible synergies from mergers/acquisitions, and a new price target after the action has taken place.