IPOs - Speak The Basics (Very Good Reading) (6)

Quiet period -

The time period in which companies in registration are forbidden by the Securities and Exchange Commission to say anything not included in their prospectus, which could be interpreted as hyping an offering.

Starts the day a company files an S-1 registration statement and lasts until 25 days after a stock starts trading. The intent and effect of a quiet period have been hotly debated.



Road show -

A tour taken by a company preparing for an IPO in order to attract interest in the deal. Attended by institutional investors, analysts, and money managers by invitation only.

Members of the media are forbidden.


Selling stockholders -

Investors in a company who sell part or all of their stake as part of that company's IPO.

Usually considered a bad sign if a large portion of shares offered in an IPO comes from selling stockholders.


S-1 -

Document filed with the Securities and Exchange Commission announcing a company's intent to go public.

Includes the prospectus;

also called the registration statement.


Spinning -

The practice by investment banks of distributing shares to certain clients, such as venture capitalists and executives, in hopes of getting their business in the future.

Outlawed at many banks.


Syndicate -

A group of investment banks that buy shares in an IPO to sell to the public.

Headed by the lead manager and disbanded as soon as the IPO is completed.