Window of Opportunity

What Is a Window of Opportunity?

A window of opportunity is a short, frequently transient time span during which a rare and wanted action can be taken. When the window shuts, the opportunity might in all likelihood at no point ever come in the future. In a competitive market with numerous participants seeking to expand unmistakable or immaterial value for their constituents — whether owners, different shareholders, employees, or maybe their local area — the window will close fast when a decent deal is recognized.

A window of opportunity can apply to different circumstances, and sometimes they go unrecognized.

Figuring out Windows of Opportunity

Likewise called the critical window, a window of opportunity is the short period of time inside which some action can be taken that will accomplish an ideal outcome. When this period is finished, or the "window is closed," the chance to pursue the open door is as of now not conceivable.

At times, it is feasible to plan for and expect a window of opportunity and afterward act likewise when the window opens. Commonly, notwithstanding, an opportunity emerges that is unexpected, and it depends on people to distinguish the opportunity and afterward to act on it. In circumstances with exceptionally short or eccentric windows of opportunity, automation might be employed to make the most of these windows, as in algorithmic trading.

At times, critical windows might be misleadingly forced (or even erroneously implied) as a marketing tactic to energize action — for instance, with a "restricted time offer."

Instances of Windows of Opportunity

The Subscription Period for a Hot IPO

Institutional investors and the best retail clients of the underwriters for Google's IPO in 2004 were given a chance to buy shares at the initial offering price. The people who exploited the window bought these oversubscribed shares at $85 per share. The shares ended the main day of trading at just more than $100 per share.

Mergers and Acquisitions (M&A) in a Sector With Scarce Assets

The biotechnology industry is very active, with many startups and firms in beginning phase pipeline development of treatments with blockbuster potential. In any case, history has shown that a huge majority of these firms won't find lasting success with their clinical trials.

For the distinct minority that shows viability and safety in their treatments, a group of large-cap drug and biotech companies will pay heed. Then, a window will open for acquisition. Celgene Corp., provoked by a series of positive data readouts by Juno Therapeutics, Inc., agreed to secure the development-stage immunotherapy biotech firm for $9 billion in cash in mid 2018.

Building or Land Purchase

In 2015, Facebook purchased a 56-section of land industrial site in Menlo Park, Calif., from Prologis, Inc., and in 2016, the company practiced an option to purchase 1,000,000 square feet of office space, likewise in Menlo Park, that it was leasing from the Wisconsin Investment Board.

Since the area is highly wanted by growing high tech companies, Facebook ensured it acted rapidly to secure the real estate. This was unquestionably for the benefit of the company, yet it likewise was advantageous for the a huge number of employees to have a large centralized headquarters for intellectual and social [synergies](/cooperative energy).

Highlights

Windows of opportunity are frequently short lived, and assuming the window closes before the decision is made, the chance can be lost for eternity.
In investing, trading opportunities for hot IPOs, a real estate purchase, or a chance at a M&A deal all current themselves as windows of opportunity.
Windows of opportunity are short periods of time inside which a key decision can be made that will deliver an ideal outcome.