The term catalyst refers to a disclosure that significantly impacts the value of a security. Catalysts can positively or negatively affect a security's value.
Also referred to as a catalyst event, a catalyst is information that can cause investors to swiftly change their valuation of a security. Oftentimes used when describing events impacting the value of equities, the term is also used when describing different types of information, including:
While certain announcements may change the fundamentals of the company's stock, such as an earnings report, a catalyst may also affect investor sentiment, such as a change in leadership. In either case, the value placed on the stock by investors will shift significantly.