Dictionary of Finance and Investment Terms: deal stock
deal stock
stock that may be rumored to be a takeover target or the party to some other major transaction such as a merger or leveraged buyout. The stock may be subject to a rumor of a prospective deal, or a deal may have been announced that attracts additional bidders and the company is said to be in play. Arbitrageurs and other speculators will attempt to buy deal stocks before the deal is finalized or profit when the stock price rises. Of course, if there is no deal, these speculators may lose money if the stock falls back to its pre-rumor price.
