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".

RELATED TERMS
  1. Red Herring

    A preliminary prospectus filed by a company with the Securities ...
  2. SEC Form 10

    SEC Form 10 is a filing with the Securities and Exchange Commission ...
  3. Going Public

    Going public is the process of selling shares that were formerly ...
  4. Prospectus

    A prospectus is a document delivered to potential investors that ...
  5. Statement of Additional Information ...

    A statement of additional information (SAI) is a supplementary ...
  6. SEC Form 424B3

    The prospectus form that a company is required to file, detailing ...
Related Articles
  1. Investing

    Understanding The Top SEC filing forms

    It's easier than ever to keep track of your SEC filing status online.
  2. Investing

    Using Public SEC Filings To Analyze Companies

    Reports from the Securities and Exchange Commission provide investors with an edge in determining the investment value of companies. Learn what to look for in these financial reports.
  3. Investing

    What are Financial Statements?

    Financial statements are a picture of a company’s financial health for a given period of time at a given point in time. The statements provide a collection of data about a company’s financial ...
  4. Investing

    12 Things You Need to Know About Financial Statements

    Before investing, discover 12 characteristics of financial statements that can help you evaluate companies and increase your chances of choosing a winner.
  5. Investing

    How To Decode A Company's Earnings Reports

    Read between the lines to decipher a company's true financial condition.
  6. Investing

    How To Efficiently Read An Annual Report

    Learn how to read between the lines and decipher the actual condition of a company.
  7. Investing

    Digging Deeper: The Mutual Fund Prospectus

    The jargon in a mutual fund prospectus can be daunting. Find out how to get to the important stuff.
  8. Insurance

    4 Signs A Private Company Is Going Public

    There are several signs that can indicate that a company is about to make the big leap. Find out what they are.
RELATED FAQS
  1. 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 >>
  2. Is a private company required to show financial information?

    Understand whether a private company is required to disclose financial information to the public. Learn what is required ... Read Answer >>
  3. How long is the validity period for a Series 63 exam if I have not been registered?

    Find out how registration begins using Series 63 results and how long scores are valid without registration. Learn more about ... Read Answer >>
  4. How do marketable securities impact a company's financial statements?

    Understand how the various components of the financial statements are impacted by investments in marketable securities owned ... Read Answer >>
  5. How can I cancel a bank draft that I have purchased?

    Learn about what a bank draft is, how it works, the circumstances under which a bank draft may be cancelled, and what the ... Read Answer >>
  6. How does piggyback registration work?

    Registration rights ensure that companies cooperate during the registration process through which investors register shares ... Read Answer >>
Hot Definitions
  1. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  2. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  3. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  4. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  5. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
  6. Price Elasticity of Demand

    Price elasticity of demand is a measure of the change in the quantity demanded or purchased of a product in relation to its ...
Trading Center