- effective date, date issue is released to be sold
- quiet period, cooling off period, time from filing of registration statement to effective date
- 20 day cooling off period
- allows issuer to do final review of issue
- allows issuer to register with states where issue will be sold-blueskying
- gives public time to hear news about new issue
- gives SEC time to review prospectus-is required information present?
preliminary prospectus, red herring
- price is NOT shown
- industry people NOT general public CAN receive information about issue
- quiet period, NO promotion or sales of issue
- effective date, wait until E.D. announced, then can solicit
- preliminary prospectus CANNOT have ads included
underwriter and syndicate members determine the price the public will buy issue @
- selling syndicate looks at 1)current performance of company, 2)value of company against market c)look at corporate dividends and earnings, products, other companies in industry, other factors that affect market price public is willing to pay
- selling group, NO influence on price
Which of the following can be sent with the preliminary prospectus?
- nothing
- registration isn't done
- until issue effective, advertising CANNOT happen
prospectus
- Securities Act of 1933: stock and corporate bonds must include prospectus
- comes with registration statement
- SEC reviews before release
- SEC makes sure necessary info has been included, disclosures made
tombstone advertisement
- in newspaper
- underwriters show new issue is available
- primary issue, corporation to investors
- secondary distribution, large stockholder selling to other investors
- split offering, corporation and large corporation are selling securities at same time
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