What is a Prospectus?

Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Prospectus”
A prospectus is a legal document issued by companies that are offering securities for sale. Mutual funds also provide a prospectus to potential clients, which include a description of the fund's strategies, the manager's background, the fund's fee structure and a fund's financials statements.
There are two types of prospectuses for stocks and bonds: preliminary and final. The preliminary prospectus is the first offering document provided by a securities issuer and includes most of the details of the business and transaction in question. Some lettering on the front cover is printed in red, which results in the use of the nickname "red herring" for this document. The final prospectus is printed after the deal has been made effective and can be offered for sale, and supersedes the preliminary prospectus. It contains finalized background information including such details as the exact number of shares/certificates issued and the precise offering price.
To get an idea of the role of the prospectus, let's assume Company XYZ is pursuing an IPO. Before launching the IPO, Company XYZ must first file a registration statement, which discloses all material information about the company, with the SEC. Part of the registration statement is the prospectus, which must be provided to all purchasers of the new issue.
When the registration statement becomes effective, Company XYZ will amend the preliminary prospectus to add such important information as the offering price and the underwriting spread.

By Barry Norman, Investors Trading Academy

What is a Prospectus? Video Statistics

Total Views
Total Likes
Total Comments

What is a Prospectus? Comments

What is a Prospectus? Reviews

The Most Popular Traffic Exchange Service
Ayesha Banu
Ayesha Banu
01 August 2018

so nice video 's

Chuck Norris
Chuck Norris
5 star

The Vatican's latest fundraiser is selling WWCND (What Would Chuck Norris Do) braclets.

5 star

The mind is everything. What you think you become.

What is a Prospectus? Wiki

2 Week Diet

What is an interrogative pronoun and adverb in English. What or WHAT may also refer to:. Barry Norman, ITA, Finance Education, Analysis, How to Trade, Make Money, Finance Words, Finance Vocabulary, Understanding Finance, ITA Finance Education, Stock Market, Futures, Investment, Economy, Trading, News, Technical, Options, Academy, Talking Financial Glossary, Major Economic Events, This Week on Finance, Daily Market Review, Weekly Market Review, Economic Channel, Economic News, Person of The Week, Educational Classes, ITA.academy, Forex, Stocks, Prospectus,

What is a Prospectus? Images

What is a Prospectus? image

What is a Prospectus? Similar Videos

Video Data

  • Duration1:48
  • Date11 March 2015
  • ChannelInvestor Trading Academy
  • Video QualityHD

Similar Videos


Popular TV Seasons

Shopify Make a Money

Popular Apps

Popular Podcasts