A
fire sale is the
sale of goods at extremely
discounted prices, typically when the seller faces
bankruptcy or other impending distress. The term originated in reference to the sale of goods at a heavy discount due to
fire damage. A fire sale may or may not be a
closeout, the final sale of goods to zero
inventory. Fire sales 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
signaling negative information.