What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community. Get Started Now!

Liquidity event

A liquidity event is an opportunity for an investor who holds an illquid asset to sell said asset.

Expanded Definition

Most typically this phrase is used to refer to an initial public offering for a privately held company, but can be used to refer to any asset where one has an opportunity to sell an asset that isn't traded on an exchange.The term has seen a resurgence in popularity during the credit crisis of 2008 as the Federal Reserve and the banks is attempting to create liquidity events to restore liquidity for many frozen assets such as auction rate securities and mortgage backed securities.

Related Fool Articles

Related Terms

Relevant External Links

Recent Mentions on Fool.com