Company Catalysts: Launches, Deals & Approvals

A catalyst is an event that can change how the market values a company. Some are scheduled, like earnings or drug decisions; others arrive without warning, like a takeover bid. Here are the main types and how to handle the risk around them.

The main kinds of catalysts

• Earnings reports: four times a year, the most common scheduled catalyst.
• Product launches and big contracts: new revenue streams or major customer wins.
• Regulatory decisions: for drug companies, an FDA approval or rejection can make or break the stock.
• Mergers and acquisitions: a buyout offer usually lifts the target toward the offer price.
• Index changes: joining a major index brings buying from index funds.
• Capital moves: new buybacks, dividend changes or share sales.

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