Prospectus: Difference between revisions
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{{a| | {{a|repack|}}{{d|Prospectus|/prəsˈpɛktəs/|n|}} | ||
(Also: ''“offering circular”''; ''“offering memorandum”''; ''“information memorandum”''): A long document describing some [[securities]] which no-one reads, but which managers are nonetheless convinced presents them with [[document risk|risk of huge liability]]. Much of it accordingly comprises [[disclaimer]]s, and there is a specific [[legal department]] [[employee]] — a [[red-herring ninja]] — who can make an entire living in the cool, nourishing foliage of such a document. | (Also: ''“offering circular”''; ''“offering memorandum”''; ''“information memorandum”''): A long document describing some [[securities]] which no-one reads, but which managers are nonetheless convinced presents them with [[document risk|risk of huge liability]]. Much of it accordingly comprises [[disclaimer]]s, and there is a specific [[legal department]] [[employee]] — a [[red-herring ninja]] — who can make an entire living in the cool, nourishing foliage of such a document. | ||
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A draft version of a prospectus — sometimes released for pre-marketing purposes — is called a “[[red herring]]” not, as you would think, in frank acknowledgment that is an impenetrable tract that will distract a reader from whatever she ought to be doing for an unconscionably long time and without perceptible benefit — though only once — but on account of an angry red [[disclaimer]] written down the margin of the cover warning anyone who should pick it up that it is not to be trusted. | A draft version of a prospectus — sometimes released for pre-marketing purposes — is called a “[[red herring]]” not, as you would think, in frank acknowledgment that is an impenetrable tract that will distract a reader from whatever she ought to be doing for an unconscionably long time and without perceptible benefit — though only once — but on account of an angry red [[disclaimer]] written down the margin of the cover warning anyone who should pick it up that it is not to be trusted. | ||
Those who fear their investors might not understand the prospectus — or might, but will sue anyway — might consider a [[big boy letter]]. | |||
{{sa}} | {{sa}} | ||
*[[Big boy letter]] | |||
*[[Document risk]] | *[[Document risk]] | ||
*[[Residents of New Hampshire]] | *[[Residents of New Hampshire]] | ||
Revision as of 14:36, 12 November 2022
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The Law and Lore of Repackaging
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Prospectus
/prəsˈpɛktəs/ (n.)
(Also: “offering circular”; “offering memorandum”; “information memorandum”): A long document describing some securities which no-one reads, but which managers are nonetheless convinced presents them with risk of huge liability. Much of it accordingly comprises disclaimers, and there is a specific legal department employee — a red-herring ninja — who can make an entire living in the cool, nourishing foliage of such a document.
If 400 pages of 9 point Times New Roman describing a collateralised debt obligation were not dreary enough — and be assured, readers, it is dreary enough — large swathes of it, concerning such crushingly on-point topics as its non-justiciability in jury trials, will be addressed in BLOCK CAPITALS to RESIDENTS OF NEW HAMPSHIRE, a constituency that appears perpetually in need of being shouted at.
A draft version of a prospectus — sometimes released for pre-marketing purposes — is called a “red herring” not, as you would think, in frank acknowledgment that is an impenetrable tract that will distract a reader from whatever she ought to be doing for an unconscionably long time and without perceptible benefit — though only once — but on account of an angry red disclaimer written down the margin of the cover warning anyone who should pick it up that it is not to be trusted.
Those who fear their investors might not understand the prospectus — or might, but will sue anyway — might consider a big boy letter.