Special situation

A special situation in finance is an atypical event which has the high potential to alter the future course of a business, materially impacting the company's value. The connotation of the event may be both positive and negative The notion also covers corporate restructuring and corporate transactions, such as spin-offs, share repurchases, security issuance/repurchase, asset sales, or other catalyst-oriented situations. Further, a shareholders conflict is also considered a special situation.
Seeking for and investing in special situations is a strategy pursued by a number of investors. To take advantage of a special situation, a hedge fund manager must identify an upcoming event that will increase or decrease the value of the company's equity and equity-related instruments.

Definition

There is also a definition of special situation by Benjamin Graham:

In his well-known book Security [Analysis (book)|Security Analysis], Benjamin Graham divides special situations into six classes:

Class A: Standard arbitrages, based on a reorganization, recapitalization or merger plan
Class B: Cash payout, in recapitalization or mergers
Class C: Cash payments on sale or liquidation
Class D: Litigated matters
Class E: Public utility breakups
Class F: Miscellaneous special situations