An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the market price. Taobiz explains Tender Offer Tender offers may be friendly or unfriendly. Securities and Exchange Commission laws require any corporation or individual acquiring 5% of a company to disclose information to the SEC, the target company and the exchange.
A stock whose value increases 10 times its purchase price. This expression was coined by Peter Lynch, one of the greatest investors of all time, in his book "One Up On Wall Street" (1989). Taobiz explains Tenbagger These types of returns are considered once-in-a-lifetime investments. Some of the most famous examples of tenbaggers include now blue-chip stocks like Wal-Mart, Hewlett-Packard and General Electric. Many investors are constantly in search of the elusive tenbagger, but there isn't an exact science to discover tenbagger stocks. Generally, these explosive companies are smaller companies (market cap under $1 billion) with large potential markets. Over time, these companies grow into their potential markets, providing patient investors with handsome returns.
A slang term referring to one of the many phone terminals on the floor of the New York Stock Exchange that is used by floor traders to receive orders. Taobiz explains Telephone Booth With the advent of technology many floor traders use personal digital assistants (PDAs) to receive orders as well.
A market with a low number of buyers and sellers. Since few transactions take place in a thin market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also typically result in a larger spread between the two quotes. Also known as a "narrow market". Taobiz explains Thin Market A thin market has high price volatility and low liquidity. If supply or demand changes abruptly, resulting in more buyers than sellers or vice versa, there will typically be a material impact on prices. Since few bids and asks are quoted, potential buyers and sellers may find it difficult to transact in a thin market.
The market price that a stock will theoretically have following a new rights issue. Although the stock price is not likely to change immediately following the new rights issue, it will change as the rights expiration date approaches. Taobiz explains Theoretical Ex-Rights Price The theoretical ex-rights price is based on the company's market capitalization and the number of shares outstanding. For example, if a new rights offering gives buyers the right to purchase 25% more shares than there are currently outstanding, the market price of the stock will theoretically be 25% less in the future than it is today (assuming 100% of the new rights will be exercised by the holders).
A third-party firm willing to buy or sell stocks listed on exchanges at publicly quoted prices. Taobiz explains Third Market Maker A broker is likely to direct an order to a third market maker for one of two reasons: A) the broker is not a member of the exchange on which the stock is traded. B) the third market maker entices the brokerage by paying (maybe a cent or two) per share for the trade.
A measure of the compound rate of growth in a portfolio. Because this method eliminates the distorting effects created by inflows of new money, it is used to compare the returns of investment managers. This is also called the "geometric mean return," as the reinvestment is captured by using the geometric total and mean, rather than the arithmetic total and mean. Taobiz explains Time-Weighted Rate of Return It is assumed that all cash distributions are reinvested in the portfolio and the exact same periods are used for comparisons. When calculating time-weighted rate of return, the effect of varying cash inflows is eliminated by assuming a single investment at the beginning of a period and measuring the growth or loss of market value to the end of that period.
An order to buy or sell an asset that is placed at a specific time period during a trading session. A time-of-day order enters the market at a predetermined minute and remains good until canceled, unless otherwise specified. Taobiz explains Time-Of-Day Order Time-of-day orders allow investors to enter the market at very specific time intervals. An investor looking to place an order immediately following a press conference or news release can use a time-of-day order to be executed the minute following the event. For example, a time-of-day order may be placed to sell 100 shares of Microsoft on July 15, at 1:15pm.