What Is A Preliminary Prospectus?
The first offering document printed by the company with some of the details of an IPO. The price range and number of shares to be issued is usually included in the preliminary prospectus but the terms may be changed before the final prospectus is distributed. Some lettering on the front cover is printed in red so many people refer to it as the "red herring." During presentations to potential investors, company representatives are limited to discussing only information that is contained in the current prospectus.
Other IPO FAQs
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Q:
What Is An Ipo?
A: The very first sale of stocks to the public is called an initial public offering (IPO), and occurs on the primary market. Corporations sell stock to the public as one …
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Q:
What Is A "hot Issue"?
A: If the price for an IPO increases in the first day of trading, it is considered a hot issue. Owners and employees of brokerdealers and other industry insiders are …
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Q:
What Should I Look For In A Prospectus?
A: Companies are required to outline all foreseeable potential risks affecting their business, and all the information must be confirmed by an independent CPA. Companies …
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