Pilot Fishing

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Sticky Deal

    An issue of new securities that may present a selling challenge ...
  2. Standby Underwriting (Standby)

    A type of agreement to sell shares in an initial public offering ...
  3. Subscribed

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

    A document circulated to potential buyers of a specific security ...
  5. Underpricing

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

    A situation in which the demand for an initial public offering ...
Related Articles
  1. In an IPO, who is a greensheet distributed ...
    Investing

    In an IPO, who is a greensheet distributed ...

  2. Wanna Be A Bigwig? Try Investment Banking
    Professionals

    Wanna Be A Bigwig? Try Investment Banking

  3. IPO Lock-Ups Stop Insider Selling
    Investing Basics

    IPO Lock-Ups Stop Insider Selling

  4. Are IPOs available to short sell immediately ...
    Active Trading Fundamentals

    Are IPOs available to short sell immediately ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center