A shark watcher is referred to a firm whose main job is to detect the possibility of a hostile takeover. A shark watcher firm analyses the trading patterns of the stocks and then determines the parties who are accruing the stocks of the client company. Companies also hire shark watchers when there is a risk arbitrage (an investment strategy during mergers and acquisitions which involves buying or shorting the acquiring company’s stock) involved.
Since the shark watcher is monitoring the trading patterns of the stock, early detection of a hostile takeover is possible. By doing this the client company may decide further actions to be taken to avert the possibility of a takeover or to offer a deal to the acquiring company. Shark watchers play an important role in the world of finance as they offer expertise during or before the action of a takeover.
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