8 questions reported in Third Point interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
Questions
Easy · Medium
Hard
Model builds
Built in the spreadsheet grid
Deal break risk, spread maths, regulatory timelines and downside to unaffected. 4 questions
An entry-level special-situations question that tests whether you can identify non-fundamental sellers.
Why can a spin-off trade below intrinsic value immediately after distribution?
Event-driven funds use stub trades to test relative-value construction and corporate-action mechanics.
A holding company owns a listed subsidiary worth $900m, has $200m of net debt and no other material assets, but its own equity trades at $500m. Is this automatically a stub trade?
Event-driven funds ask this because spin-offs are a recurring, structural inefficiency.
A large-cap company announces it will spin off a division. How would you analyse the opportunity, and where does the inefficiency come from?
Event-driven funds either run campaigns or trade alongside them.
An activist takes a 6% stake in a company and demands a break-up. How do you assess whether to invest alongside them?
Variant perception, catalyst mapping, short construction and sizing. 2 questions
A basic stock-pitch follow-up used to separate a view from a tradeable view.
What is a catalyst in a stock pitch? Give two examples and explain why an undervalued stock can still be a poor investment without one.
Funds ask this to assess both research capability and compliance judgement.
How would you conduct primary research on a retailer you're considering shorting? Where is the legal line?
Merger models, accretion/dilution, purchase accounting and deal judgement. 2 questions
A curveball used to see whether you reason from first principles.
Can enterprise value be negative? What would that imply, and would you buy such a company?
Essential for conglomerates and any company an activist is targeting.
A conglomerate has three divisions in unrelated industries. How would you value it, and why might the sum exceed the market price?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Company tags reflect where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with Third Point.