Preliminary Prospectus

DEFINITION of 'Preliminary Prospectus'

A first draft registration statement filed by a firm prior to proceeding with an initial public offering of securities. The document, filed with the Securities & Exchange Commission, is intended to provide pertinent information to prospective shareholders about the company's business description, management, strategic initiatives, financial statements and ownership structure.

BREAKING DOWN 'Preliminary Prospectus'

The SEC requires a preliminary prospectus to be printed with red ink on the left side of the cover; as a result, the document has been nicknamed the "red herring".

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RELATED FAQS
  1. Which statement is FALSE about a prospectus issued under the Securities Act of 1933?

    A. It is a summary of the registration statement.B. A preliminary version is often called a "red herring".C. It provides ... Read Answer >>
  2. What is the difference between a summary prospectus and an offering memorandum?

    Understand what investments require a summary prospectus or a offering memorandum, and learn the differences between the ... Read Answer >>
  3. How is a penny stock created?

    Understand how penny stocks are issued and regulated, and learn how these sometimes rewarding but always risky investments ... Read Answer >>
  4. How can I get a mutual fund prospectus?

    Read and understand the prospectus before investing in a mutual fund. You can obtain a copy from the fund company, your financial ... Read Answer >>
  5. Where can I get a company's prospectus and/or financial statements?

    These types of company documents have become increasingly accessible with the advent of the Internet. Most companies have ... Read Answer >>
  6. If an issuer wishes to register a security in the state ...

    The correct answer is a. Registration by coordination is permitted when the issuer has filed a registration application with ... Read Answer >>
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