A special situation in finance is an atypical event which has the high potential to alter the future course of a business, materially impacting the company's value. The connotation of the event may be both positive (for example, merger or acquisition) and negative (conflict, distress, etc.) The notion also covers corporate restructuring and corporate transactions, such as spin-offs, share repurchases, security issuance/repurchase, asset sales, or other catalyst-oriented situations. Further, a shareholders conflict is also considered a special situation.
Seeking for and investing in special situations is a strategy pursued by a number of investors. To take advantage of a special situation, a hedge fund manager must identify an upcoming event that will increase or decrease the value of the company's equity and equity-related instruments.[1]
There is also a definition of special situation by Benjamin Graham:
First, just what is meant by a "special situation"? Convention has not jelled sufficiently to permit a clear-cut and final definition. In the broader sense, a special situation is one in which a particular development is counted upon to yield a satisfactory profit in the security even though the general market does not advance. In the narrow sense, you do not have a real “special situation” unless the particular development is already under way.[2]
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special, situation, special, situation, finance, atypical, event, which, high, potential, alter, future, course, business, materially, impacting, company, value, connotation, event, both, positive, example, merger, acquisition, negative, conflict, distress, no. A special situation in finance is an atypical event which has the high potential to alter the future course of a business materially impacting the company s value The connotation of the event may be both positive for example merger or acquisition and negative conflict distress etc The notion also covers corporate restructuring and corporate transactions such as spin offs share repurchases security issuance repurchase asset sales or other catalyst oriented situations Further a shareholders conflict is also considered a special situation Seeking for and investing in special situations is a strategy pursued by a number of investors To take advantage of a special situation a hedge fund manager must identify an upcoming event that will increase or decrease the value of the company s equity and equity related instruments 1 Contents 1 Definition 2 Classes of special situations 3 See also 4 References 5 External linksDefinition editThere is also a definition of special situation by Benjamin Graham First just what is meant by a special situation Convention has not jelled sufficiently to permit a clear cut and final definition In the broader sense a special situation is one in which a particular development is counted upon to yield a satisfactory profit in the security even though the general market does not advance In the narrow sense you do not have a real special situation unless the particular development is already under way 2 Classes of special situations editIn his well known book Security Analysis Benjamin Graham divides special situations into six classes 3 Class A Standard arbitrages based on a reorganization recapitalization or merger plan Class B Cash payout in recapitalization or mergers Class C Cash payments on sale or liquidation Class D Litigated matters Class E Public utility breakups Class F Miscellaneous special situationsSee also editAlternative investments Bankruptcy Default finance Distressed securities Going concernReferences edit HFR I Strategy Definitions Hedge Fund Research Inc Retrieved 17 March 2011 Benjamin Graham on Special Situations Benjamin Graham Special Situation Investing in Security Analysis 1951 edition pp 729 734 External links editWhat s Special About Special Situations Fixed Income Special Situation Survey by Forbes Goldman Special Situation Profit Seen at Risk With Volcker Rule Fund com Special Situations Tracker Retrieved from https en wikipedia org w index php title Special situation amp oldid 1030031947, wikipedia, wiki, book, books, library,
