Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

In Play

What it is:

A stock is in play when it is widely believed to be a takeover target.

How it works (Example):

Let's say Company XYZ has a ton of cash on its balance sheet, and activist investors have been pressuring it for nine months to sell. Company XYZ finally decides that it is for sale, and announces that it is exploring "strategic partnerships" with interested investors.

Company XYZ stock is in play.

Why it Matters:

When a stock is in play, it can run up quickly. That's because the eventual buyer is likely to pay a premium over the current stock price in order to induce the shareholders to sell the company and to beat out any competing bidders. For that reason, some traders are interested in stocks that are in play, and perhaps more important, stocks that could become in play soon.