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".

  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Red Herring

    A preliminary prospectus filed by a company with the Securities ...
  3. SEC POS AM Filing

    A filing that is made by companies which have filed for registration ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Public Offering Price - POP

    The price at which new issues of stock are offered to the public ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
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  1. 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 Full Answer >>
  2. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  3. How often do mutual funds report their holdings?

    The Securities and Exchange Commission (SEC) requires mutual funds to report complete lists of their holdings on a quarterly ... Read Full Answer >>
  4. Do financial advisors need to be approved by FINRA?

    The term "financial advisor" can refer to a couple of different roles. It most often refers to a broker-dealer or an investment ... Read Full Answer >>
  5. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
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