Equity Financing Flashcards
IPO
Corporations first offering to the public at a market value reflecting future expected growth
Lockup
180 period where insiders cannot sell their shares
Phantom Stock
Function as a bonus pool charged out of earnings
Anti-options
Preemptive Right
Existing stockholders have the first right to purchase newly issued shares
NOT the standard
Can be sold if not used
In 48 states
Primary Distribution
Refers to distribution of new stock / all bonds
Also called primary offering
Private Placement
Sale of investment to an institutional investor
If securities are purchased for INVESTMENT we do not need SEC
Securities purchased through private placements cannot be sold for at least 2 years
Secondary Distribution
Re-sale of previously issued stock by investors that IS registered with the SEC
SEC Rule 144
Conditions under which the holder of a security that is unregistered can make a public sale w/o a registration statement
SEC Rule 144a
Exempts US and foreign corporations from registration requirements for sale of stock / bond offering
Investors freely trade privately placed securities
SEC Rule 415
Shelf Registration
corporations can file registration for securities they plan to use in the future when conditions are favorable
Tracking Stock
Issued by parent corporation to financially track subsidiary, in hopes of growth
Separate the two income statements
Future acquisition / reabsorption into parent company is usually the final reward
Venture Capital
Risk capital
Financing for startups or companies on new ventures from individual investors / entrepreneurs
