People-related Financial Vocabularies

Analyst

An analyst is an employee of a brokerage or fund management house who studies companies and makes buy-and-sell recommendations on stocks.

Kicker

A kicker is an additional feature of a debt obligation that increases its marketability and attractiveness to investors.

Activist Investor

An activist investor is a minority shareholder who seeks to influence decision making at a company by voicing concerns, engaging in a dialogue with management, or lobbying other shareholders for support. The demands could include changes in management, representation on the board, acquisitions or divestitures, salaries, bonus payments or, use of retained earnings.

Agent

An agent is a party appointed to act on behalf of a principal entity or person. In the context of project financing, it refers to the bank in charge of administering project financing.

Block Trader

A block trader is a dealer who will take a position in the block trades to accommodate customer buyers and sellers of blocks.

Bondholder

Bondholders own bonds issued by a company. In a liquidation, the bondholders have first priority.

Broker-Dealer

A broker-dealer is any person, other than a bank, engaged in the business of buying or selling securities on its own behalf or for others.

Buy-Side Analyst

A buy-side analyst is a financial analyst employed by a nonbrokerage firm, typically one of the larger money management firms that purchases securities on its own account.

Gray Knight

In a merger or acquisition, a gray knight is an acquiring company that outbids a white knight in pursuit of its own best interests, although it is friendlier than a hostile bidder.

White Knight

A white knight is a friendly potential acquirer sought out by a target firm that is threatened by a less welcome suitor.

Lady Macbeth Strategy

The Lady Macbeth strategy is a strategy in which a third party poses as a white knight in a takeover bid, and then joins forces with an unfriendly bidder.

Spaceman

A spaceman is an entity specifically created to assist in tax evasion and was popular in the Russia in 2000s. Spacemen are typically registered in the names of people who have lost identification. They are special purpose vehicles that do not perform any real activities and pay zero or minimal tax. They are called “spacemen” because they exist for a very short period of time (usually 6 months to 2 years) and then disappear (into space). This type of firm is also called a “dump,” “flash-light,” “bruise,” or “hedgehog.” A blue-chip index is an index that tracks the performance of a group of blue-chip companies, which are well-known companies with a history of growth and dividend payments.

Santa Claus Rally

Santa Claus rally is a seasonal rise in stock prices in the last week of the calendar year, between Christmas and New Year's Day.

Widow-and- Orphan Stock

Widow-and-orphan stock is a stock paying high dividends with a low beta and noncyclical business, that is an extremely safe investment.

Winner's Curse

Winner's curse refers to a problem faced by uninformed bidders. For example, in an initial public offering uninformed participants are likely to receive larger allotments of issues that informed participants know are overpriced.

Zombies

Zombies are companies that continue operation while they await merger or closure, even though they are insolvent and bankrupt.

Sharpe Ratio

Sharpe ratio is a measure of a portfolio's excess return relative to the total variability of the portfolio. It is named after William Sharpe, Nobel Laureate, and developer of the capital asset pricing model.

Unicorn

A unicorn is a privately-owned start-up organization which is valued over $1 billion.

Angel Investor

Angel investors are individuals providing venture capital to exchange for a stake in the company which are generally start-ups.