Event-driven investing

Event-driven investing or Event-driven trading is a broad term encompassing hedge fund investment strategies that seeks to exploit pricing inefficiencies that may occur before or after an event. Examples of such events could be an earnings call, bankruptcy, merger, acquisition, or spinoff. In more recent times market practitioners have expanded this definition to include additional events such as natural disasters, regulatory changes, and actions initiated by shareholder activists. However, merger arbitrage remains the best-known investment strategy within this group.

This strategy was successfully utilized by Cornwall Capital and profiled in "The Big Short" by Michael Lewis.

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