Pilot Fishing


DEFINITION of 'Pilot Fishing'

A type of pre-marketing of an initial public offering (IPO) that involves testing investor sentiment to receive feedback on how the market may respond to an issue. Pilot fishing has led to much controversy because it could undermine the role of investment bankers by providing advice to clients about the price at which the IPO is launched.

BREAKING DOWN 'Pilot Fishing'

Pilot fishing is practiced in Europe, but SEC regulations about what can and cannot occur during the SEC's IPO approval process prevent this from happening in the U.S. Analyst research is not allowed to be published before IPOs are approved by the SEC, so decisions made by investors is based mainly on prospectuses.

  1. Sticky Deal

    An issue of new securities that may present a selling challenge ...
  2. Teaser

    A document circulated to potential buyers of a specific security ...
  3. Subscribed

    Newly issued securities that an investor has agreed or stated ...
  4. Subsequent Offering

    An offering of additional shares after the issuing company has ...
  5. Underpricing

    The pricing of an initial public offering (IPO) below its market ...
  6. Standby Underwriting (Standby)

    A type of agreement to sell shares in an initial public offering ...
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  1. In an IPO, who is a greensheet distributed to and for what purpose?

    One of the most talked about documents that arises in the process of introducing a new issue is the greensheet. This is an ... Read Full Answer >>
  2. How does an IPO get valued? What are some good methods for analyzing IPOs?

    The price of a financial asset traded on the market is set by the forces of supply and demand. Newly issued stocks are no ... Read Full Answer >>
  3. Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the ... Read Full Answer >>
  4. What does 'going public' mean?

    Going public refers to a private company's initial public offering (IPO), thus becoming a publicly traded and owned entity. ... Read Full Answer >>
  5. What exactly is a company's float?

    The term "float" refers to the regular shares that a company has issued to the public that are available for investors to ... Read Full Answer >>
  6. Are IPOs available to short sell immediately upon trading, or is there a time limit ...

    The quick answer to this question is that an IPO can be shorted upon initial trading, but it is not an easy thing to do at ... Read Full Answer >>

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