This type of special situation revolves around holding companies or funds (e.g. closed-end) that trade at a discount to its NAV, have their assets listed on an exchange (straightforward valuation), and are easy to hedge. In essence, the idea is that a certain corporate event may eliminate the company’s discount to net asset value, however, all cases are different from each other so there are no ultimate rules here. For example, for a holding company, the discount elimination could be induced by a split-off of its major asset, while for an exchange-traded equity fund it can be triggered by the conversion into ETMF (actively managed ETF). The main point here is to spot the catalyst and research the potential risks/consequences of it failing.