In financial circles, to "fall out of bed" means that some type of unanticipated and swift financial reversal has taken place. The imagery of the phrase indicates that the sudden reversal takes the involved parties by surprise, much in the way that a sleeping person is suddenly jarred awake when falling out of a bed. There are a number of situations in which one or more parties may fall out of bed, including sudden reversals in the value of investments and unanticipated events that lead to failed business deals.
One common example is the sudden decrease in the price of a given stock option. In order for the stock to fall out of bed, the sudden drop occurs due to circumstances that are outside the scope of the forecasts made on the future movement of the option by experts. For example, if a key member of the executive team at the company issuing the stock should suddenly announce he or she is leaving, and there was no prior anticipation of that event, the price per share may suddenly drop, creating a fall out of bed situation. The downward trend may continue until a replacement is named, hopefully one that has the confidence of investors and the business community in general.
A similar phenomenon can take place during the course of a merger or acquisition. Assuming that the business deal is looked upon with favor by the investment community, this may in fact help bolster the stock of both companies as the completion date of the merger or acquisition approaches. Should the deal suddenly be called off, the backlash in terms of the effect on stock prices may be swift and severe, creating a fall out of bed trend that continues for a period of time before the stock options of both companies level off and begin to increase once more.
In general, a fall out of bed situation means that something has gone terribly wrong, and that the circumstances surrounding the sudden drop in stock prices was more or less a surprise to everyone in the investment community. While situations of this type do happen from time to time, projecting all possible outcomes can help to minimize the chance of entering into a deal only to have it collapse later on. Even when a fall out of bed situation does develop due to events that were completely unanticipated, conducting damage control can often help to slow and eventually reverse the downward trend and restore the company’s fortunes and stock prices to more attractive levels.
