21 November 2007
1)Difference between SHARE AND STOCK with example. 2)Concept of REDHERRING prospectus. 3)Concept of SHELF prospectus. 4)Concept of ABRIDGED PROSPECTUS 5)GREEN SHARE OPTION -in issue of share . 6)Concept of PRICE BAND.
19 March 2008
A red herring prospectus is a document submitted by a company (issuer) who intends on having a public offering of securities (either stocks or bonds). Most frequently associated with an Initial Public Offering (IPO), this registration statement MUST be filed with the Securities and Exchange Board of India.
19 March 2008
A provision contained in an underwriting agreement that gives the underwriter the right to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected. Legally referred to as an over-allotment option.
A greenshoe option can provide additional price stability to a security issue because the underwriter has the ability to increase supply and smooth out price fluctuations if demand surges.
Greenshoe options typically allow underwriters to sell up to 15% more shares than the original number set by the issuer, if demand conditions warrant such action. However, some issuers prefer not to include greenshoe options in their underwriting agreements under certain circumstances, such as if the issuer wants to fund a specific project with a fixed amount of cost and does not want more capital than it originally sought.
The term is derived from the fact that the Green Shoe Company was the first to issue this type of option.
19 March 2008
"Shelf prospectus" means a prospectus issued by any financial institution or bank for one or more issues of the securities or class of securities specified in that prospectus.
19 March 2008
An abridged prospectus is required when there is an issue, offer for subscription or purchase, or an invitation to subscribe for or purchase securities by means of a rights issue which is renounceable in favour of persons other than existing members of that corporation and in respect of which an application has been or will be made for permission to deal with or quote such securities on a stock market of a stock exchange.
19 March 2008
A share is the quantity you own. A stock is the actual company issued (brokered) certificate, i.e " I own 100 shares (the amount) of Bershire Hathaway (the stock).
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