A fire sale is the sale of goods at extremely discounted prices. The term originated in reference to the sale of goods at a heavy discount due to fire damage. It may or may not be defined as a closeout, the final sale of goods to zero inventory. They are said to occur in the financial markets when bidders who value assets highly are prevented from bidding on them, depressing the average selling price below what it otherwise would be. This lowering of the price can cause even further issues because it may be inaccurately perceived as signalling negative information.[1]
- ^ Shleifer, Andrei; Vishny, Robert (2011). "Fire Sales in Finance and Macroeconomics". Journal of Economic Perspectives. 25 (1): 29–48. doi:10.1257/jep.25.1.29. S2CID 154994846. Retrieved 20 April 2018.