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29 Cards in this Set
- Front
- Back
Venture capital (VC)
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Financing for new, often high-risk ventures
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Registration statement
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A statement filed with the SEC that discloses all material information concerning the corporation making a public offering.
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Regulation A
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An SEC regulation that exempts public issues of less than $5 million from most registration requirements.
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Prospectus
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A legal document describing details of the issuing corporation and the proposed offering to potential investors.
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Red herring
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A preliminary prospectus distributed to prospective investors in a new issue of securities.
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Tombstone
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An advertisement announcing a public offering.
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General cash offer
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An issue of securities offered for sale to the general public on a cash basis.
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Rights offer
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A public issue of securities in which securities are first offered to existing shareholders. Also called a rights offering.
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Initial public offering (IPO)
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A company's first equity issue made available to the public. Also called an "unseasoned new issue" or an "IPO"
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Seasoned equity offering (SEO)
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A new equity issue of securities by a company that has previously issued securities to the public.
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Underwriters
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Investment firms that act as intermediaries between a company selling securities and the investing public.
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Syndicate
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A group of underwriters formed to share the risk and to help sell and issue.
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Gross spread
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Compensation to the underwriter, determined by the difference between the underwriter's buying price and offering price.
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Firm commitment underwriting
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The type of underwriting in which the underwriter buys the entire issue, assuming full financial responsibility for any unsold shares.
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Best efforts underwriting
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The type of underwriting in which the underwriter sells as much of the issue as possible, but can return any unsold shares to the issuer without financial responsibility.
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Dutch action underwriting
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The type of underwriting in which the offer price is set based on competitive bidding by investors. Also known as a "uniform price auction."
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Green Shoe provision
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A contract provision giving the underwriter the option to purchase additional shares from the issuer at the offering price. Also called the "overallotment option."
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Lockup agreement
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The part of the underwriting contract that specifies how long insiders must wait after an IPO before they can sell stock.
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Ex-rights date
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The beginning of the period when stock is sold without a recently declared right, normally two trading days before the holder-of-record date.
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Holder-of-record date
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The date on which existing shareholders on company records are designated as the recipients of stock rights. Also, the date of record.
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Standby underwriting
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The type of underwriting in which the underwriter agrees to purchase the unsubscribed portion of the issue.
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Standby fee
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An amount paid to an underwriter participating in a standby underwriting agreement.
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Oversubscription privilege
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A privilege that allows shareholders to purchase unsubscribed shares in a rights offering at the subscription price.
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Dilution
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Loss in existing shareholder's value in terms of ownership, market value, boo value, or EPS.
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Term loans
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Direct business loans of typically one to five years.
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Private placements
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Loans (usually long-term) provided directly b a limited number of investors.
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Private placements
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Loans (usually long-term) provided directly b a limited number of investors.
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Shelf registration
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Registration permitted by SEC Rule 415, which allows a company to register all isues it expects to sell within two years at one time, with subsequent sales at any time within those two years.
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Shelf registration
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Registration permitted by SEC Rule 415, which allows a company to register all isues it expects to sell within two years at one time, with subsequent sales at any time within those two years.
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