IPO Glossary of Terms
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A ftermarket
All trading activity in an IPO or secondary subsequent to the new issue offering from the underwriters.

Aftermarket Report
A series of 4 IPOfn reports that keep track of all IPOs that have come public within the last 52 week. Within the reports are data fields that rank relative performance of the issues in areas includings percentage, sector and underwriters.

A specific amount of stock in a new issue that is given to the client from the offering.

Alphabetical Listing
One of the IPOfn Money Managers/Traders Package reports that lists all the IPOs and secondarys that are in the pipeline to be priced on an alphabetical basis.

An additional registration document that is filed by the company with the SEC that has additional information regarding the proposed offering for that company.

Also referred to as the offer. It represents the price at which someone is willing to sell their stock on a market order.

B est Efforts
An underwriting that has no sponsorship by the underwriter doing the deal. The company expects to sell a certain amount of shares and the underwriter will expend their "best efforts" to do so. In the event they cannot reach that amount, only the shares that have been prepaid prior to the offering will be issued.

Represents the price at which someone is willing to buy your stock on a market order.

Bid-Ask Spread
The difference between the bid price and the ask price

Block Trade
Blocks of stock that trade with a minimum of 10,000 shares.

Boxed Deal
New issues that are done by smaller underwriters in which the aftermarket is controlled by a small group of market makers. These deals usually open at high premiums created by requirements from the underwriter to have the clients in the IPO buy additional shares in the aftermarket.

Bridge Financing
Many times the cash demands are such that interim short-term financing is needed by a company before its IPO. Money that is generally provided to a company planning to go public by the prospective underwriter. The company will issue stock to the brokerage firm or one of its subsidiaries at a price below anticipated market value. These shares will be redeemed as part of the underwriting at the offering price.

Buyer's Market
A condition in the financial markets when the buyers have a very strong input as to where an issue will get priced. This generally happens in a market that is trending lower in prices. Underwriters will usually pay closer attention to the buyer's want and needs, within reason, when that happens.

Buy Side
Those entities that are buying the IPOs and secondarys for profits and not connected with any brokerage firms.

C alendar Report
One of the IPOfn Money Managers/Traders Package reports that lists all IPOs and secondarys in the pipeline to be priced on an alphabetical basis by individual weeks.

When an IPO or secondary issue has difficulty getting investor interest, the company issuing the shares may be unwilling to reduce the price of the offering in order to entice investors into buying the new shares. Should that be an obstacle, the company may cancel the offering in favor or some other form of financing.

Change in Evaluations
An IPOfn daily fax report that lists all the IPOs and secondarys that are in the pipeline to be priced broken down by: 1) those issues that have had a change in ranking, 2) those being ranked for the 1st time and 3) those issues newly added to the system as new registrations with the SEC.

Chinese Wall
An imaginary wall of separation that exists between the brokerage firm and any investment management operations associated with that firm.

Closing Price
A stocks last transaction price for the day.

Underwriters that appear on the cover of a prospectus and help the lead manager with the distribution of the offering but do not make the final decisions.

Come Public
The process of taking a private company (where the shares are in private hands) and converting the ownership to the public's hands (where the shares are in the hands of public investors). This is done via an Initial Public Offering - IPO.

Common Stock
A unit of ownership in a public company for which the holder can vote on matters and receive dividends from the company's growth, but he or she is the last to receive assets if the company liquidates.

Convertible/Hi-Yield Report
One of the IPOfn Money Managers/Traders Package reports that lists all Convertible debt securities and Hi-Yield securities sometimes referred to a junk bonds.

Cusip Number
A number assigned by the Committee of Uniform Security Idenification Procedure (CUSIP) that appears on the face of all securities documents. Each security is given its own number so it can be easily identified.

Referring to the actual delivery of the stock certificates to the buyers as delivered from the seller. This completes the transaction.

A person who serves on a company's board of directors. This person is responsible for keeping the company on track with its current goals and is open to personal liability if sued by shareholders or other involved parties.

A Company must report all of its management practices, financial statements and legal involvements that are pertinent to an investment decision. This process assures the investor that all such pertinent information is known before the investment is made.

Discounted Secondary
Secondarys that get priced at a discount to the previous trade. This is done solely as a pre-arranged transaction between the underwriter and the issuer. It is generally thought upon to be necessary for some issues as an inducement for the new shareholders,

The amount of money or securities, out of net profits, distributed to the company's shareholders.

DPO (Direct Public Offering)
One that is offered directly to the buyers from the company without the intervention of an underwriter. Many times these offerings are done via the internet. As a generalization, they are usually companies that are not large enough to undergo a firm committment offering.

DTC Tracking (Depository Trust Company Tracking)
A service that provides a method of tracking the exact path of purchases and sales of specific securities in the new issues market. This provides the underwriters with a means of twarting premature selling by holders of the new offerings. Once exposed, the underwriters may impliment penaltys if they desire.

Due Dilegence
A process of verifying all information about a company including but not limited to financials, management, market share and risks.

E DGAR - Electronic Data Gathering, Analysis, and Retrieval
A Securities and Exchange Commission (SEC) computer database system that allows registered securities issuers to file reports with the SEC by computer instead of having to file physical documents. This data is available to the general public via the internet.

Effective Date
The day a newly registered security can be offered for sale.

Equity Pricings
An IPOfn daily fax report that lists all new issues that have been officially priced for trading that day. Any deal which might tentatively be priced during the day, if known, is also included.

The physical location where brokers transact business for their clients. The principal ones are the NYSE (New York Stock Exchange), ASE (American Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotes). This last one is not so much a physical location but rather a method of trade transaction. Each exchange has different requirements as to which companies can trade on their exchange.

Fast Track
An IPO that files a registration statement with the SEC and schedules an early series of roadshows for the institutional investors feeling that the offering will receive little if any comments from the SEC. This being true could significantly shorten the time between the company's filing date & issue date from the usual 2 to 3 months.

Filing Range
The price range that the underwriter and issuer of the IPO have agreed upon as the tentative minimum and maximum levels the stock will be priced at. This can easily be modified above or below to compensate for additional demand or the lack thereof.

Final Prospectus
The last prospectus to be printed which is after the deal has been officially priced and issued to the public. It contains the final missing pieces to the registration puzzle, including exact shares issued, at what price, fees charged and the syndicate allocations just to name a few.

Firm Committment
An underwriting that has the committment of the underwriter group to distribute all the shares issued as a result of the new issuance of stock. This is the top eschelon of offerings.

A trader in the market who is in and out of stocks usually in a matter of days or in the case of new issues maybe a matter of minutes.

The number of shares of a company that are available for trading by the public. It does not include those shares that are closely held by officers, directors and other so-called insiders.

Global Shares
The shares that are part of an offering going directly to international investors. This is usually done with the larger deals and underwriters.

Green Shoe
Often referred to as the 'overallotment'. An amount of shares, generally no greater than 15% of the orignal shares issued, that is reserved for issuance at the underwriters option at the original price. This is used by the underwriter to cover some, if not all, of the short position the brokerage firm(s) may have created in pursuit of maintaining a stable market by meeting aftermarket demand once the stock has begun to trade. The shares get issued at the IPO price which goes to the issuer, less fees. The difference between the IPO price and the price the firm sold those shares to the aftermarket buyers goes to the underwriter.

Gross Spread
The difference between the offering price and the net proceeds given to the company. Those fees include such items as selling concession (where the brokers get their commissions from), manager's fees, underwriting fees, re-allowance.

Group Sale
An underwriting that is done by the lead managers only, and not distributed to the syndicate participants or members of the selling group.

H ard Dollars
Payments made directly by a customer for services such as research.

Head Start Listing
One of the IPOfn Money Managers/Traders Package reports delivered each Friday afternoon that gives a roster of IPOs and secondarys that are expected to be priced during the following week

Hedge Fund
A mutual fund that involves speculative investing in stocks and options, while creating positions in other companies engaged in the same industry in the opposite direction as a means of reducing overall risk.

Historical Selling Group
An IPOfn report that lists IPOs and their possible selling group participants away from the underwriters. This information provides the names of firms that will most likely participate in the IPO offering.

Holding Company
A company that owns enough shares of another company to secure voting control.

Hot List
Listing of all IPOs in the IPOfn system with an opening premium expectation (or ranking) of at least .50-.75 of a point.

Indication of Interest
An expressed interest in buying or selling a security that encompasses quantity and price. This is given to a broker who then in turn passes this on to the syndicate department.

Those shareholders that own stock prior to the IPO. This group includes officers, directors, employees and pre-IPO investors both individual and corporate.

IPO - Initial Public Offering
The 1st time a company offers it shares to the public. This can also apply to a company that was previously public but went private through a buy-out. If the company decides to once again come public, it is still considered an IPO.

IPO Action Track
An IPOfn product that gives short term trading buy and sell signals on IPOs that have come public within the last 6 months by the top 5% of the underwriters.

IPOfn Ranking Index
A proprietary IPOfn index that is the only forward looking index of its kind that measures the health, or lack thereof, of the IPO market as it relates to IPOs that have yet to be priced. It is incorporated in one of the Money Managers Fax Package reports called Participating Underwriters.

Issue Bid
A reference to what the price of the offering is trading at when the stock bid price in the aftermarket is the same as the IPO price.

Issue Offer
A reference to what the price of the offering is trading at when the stock offer price in the aftermarket is the same as the IPO price.

Issue Price
The price at which a new security will be sold to the public.

Last Sale
A securities most recent transaction.

Lead Underwriter
The underwriter who, among other things, is in charge of organizing the syndicate, distributing member participation shares and making stabilizing transactions. The lead underwriter will appear on the left side of a prospectus cover.

An agreed upon time between company insiders who hold stock and the underwriters as to how long those shareholders must retain their stock before selling them in the open market. It is a show of faith by those holders in the company to the new stockholders. Sales of securities by this insider group can be done prior to that time with the consent of the underwriter.

Magic Warrant
A warrant that is part of a unit offering, separately purchasable and generally traded on its own with the effective date of the offering. This type of warrant differs from traditional warrants that are bulked with an additional type of security at one price for the combination.

Illegal buying or selling of a security to create the false impression that active trading exists in an effort to convince other people to buy more shares or sell the ones they own.

Market Capitalization
A simple form of calculating the value of a company based on the amount of shares outstanding times the price of the stock. The outstanding shares include those issued to the public (float) and insiders (restricted). More complex calculations of the true value of the company take into consideration numerous other financial information including debt.

A best efforts offering that gives a range as to the minimum and maximum amount of shares that are available from the offering. These offerings get no support from the underwriters of the deal. In fact, they are most often acting as an agent to facilitate an offering and will be a market maker for the stock in the aftermarket.

National Association of Securities Dealers Automated Quotations (NASDAQ)
a national computer network through which securities dealers execute and post transactions and record prices. It is the major method of over-the-counter trading.

New Issue
A security publicly offered for sale for the first time.

Offering Date
The first day a security is publicly offered for sale.

Offering Price
The price for which a new security issue will be sold to the public.

Opening Premium
If the opening price of an IPO is higher than its initial price, the difference would be the opening premium.

Outstanding Shares
The number of shares that have been issued by the company which are held by the insiders and the general investing public.

Often referred to as the 'green shoe'. An amount of shares, generally no greater than 15% of the orignal shares issued, that is reserved for issuance at the underwriters option at the original price. This is used by the underwriter to cover some, if not all, of the short position the brokerage firm(s) may have created in pursuit of maintaining a stable market by meeting aftermarket demand once the stock has begun to trade. The shares get issued at the IPO price which goes to the issuer, less fees. The difference between the IPO price and the price the firm sold those shares to the aftermarket buyers goes to the underwriter.

When investors want to buy more shares of a new security than will be available. Under this condition, the price of the security has a greater likelihood of opening at a premium to the offering price and going up once trading begins.

P articipating Underwriters
One of the IPOfn Money Managers/Traders Package reports that lists all the underwriters that are acting as lead or co-manager of an offering. The report enables the subscriber to see not just the entire list of IPOs and secondarys that are in the pipeline but arranges them by which undewriters are involved in which deals.

Penalty Bid
A syndicate manager's stabilizing bid which carries the provision that selling concessions will be withheld from, and a penalty will be assessed against, any syndicate members whose customers offer to sell the securities back to the syndicate.

A term referring to the new issues that are scheduled to come to market with some sort of tentative timing. Many deals may have filed to come to market but not all, at any one time, may have a tentative date. This pipeline is also referred to as 'visible supply'.

When an offering that had a tentative calendar date is pushed back in timing to a later date. If market conditions deteriorate to the point when the deal may not be viable, the tentative calendar day may be removed entirely. This may ultimately lead to a cancellation of the entire offering.

Preliminary Prospectus
Often referred to as a 'red herring'. A prospectus printed with red print on the front page on the left margin which explains that the prospectus is incomplete. There may be several such filings for a new issue as amendments are filed prior to the issuance of the offering and a final prospectus.

Price Range
The tentative minimum and maximum prices within which the IPO will probably be priced. This can be subject to upward and downward revisions as deemed necessary by both the underwriter and the issuer.

Price Revision
Any change in the tentative price range of an offering. This occurs in 2 distinctly different market conditions. If IPO is in high demand, the underwriters will often times try to balance the equation for the issuer by raising the tentative offering price. If this does not diminish demand, there could be yet another upside revision. Conversely, if the demand for the deal is low, the price could be revised lower to try and stimulate interest. This is generally unsuccessful as the deal is then view upon as damaged goods even though it may offer greater value to the investors.

Principal Shareholder
Any shareholder who owns 10 percent or more of a company's voting stock. If that is not applicable, then it will refer to the largest shareholders.

The basic amount of money invested on each individual trade derived by multiplying the number of shares by the price for either the buy or sell transaction. Commissions and other fees would be added to this number.

Privately Held
A company that is either owned by a few people, or the shares of a company that have never been offered publicly for sale.

Private Placement
An investment in the company by a group of private investors. This is usually a precursor to an IPO offering. Those private investors generally are using the IPO as an exit strategy and may be selling their shares as part of the offering. In the case of an IPO that has difficulty getting done, the company might withdraw the offering in favor of a private placement to meet cash requirements for the short term. Look for this offering to resurface at a later time in a restructured format.

IPOfn's forecast of expected opening premiums on IPOs and secondarys.

A company document required by the SEC to provide prospective buyers of newly issued securities to complete the process of full disclosure.

Quiet Filing
A filing in which many of the important details such as underwriters or terms are omitted but are scheduled to be filed through subsequent amendments at later intervals. This process will, at the very least, get the so-called 'clock' ticking with the SEC. This process usually takes longer than the normal filing pattern which can be between 2 and 3 months from filing to issue date.

Quiet Period
A period of 25 days from the time of the offering, as required by the SEC, and the first time underwriters distribute research information about the issuing company. Until such time, any information released to the public must be of factual nature.

IPOfn's forecast of the expected opening bidside premiums on IPOs and the 1st 15 minutes of bidside trading on secondarys

Red Herring
A preliminary prospectus named because of the red print on the front page of some copies which explains that the prospectus is incomplete. There may be several such filings for a new issue as amendments are filed prior to the issuance of the offering and a final prospectus.

The process of submitting a new registration statement to the SEC due to material changes in the existing statement. These conditions might alter the consideration of purchase of the proposed securities listed in the offering on the part of the investors. Minor changes in the company can be handled by the submission of an amendment to the original filing.

A procedure through which the SEC must review and approve publicly traded securities before they can be sold to the public.

REIT Real Estate Investment Trust
A corporation or business trust which owns, manages and or leases commercial real estate properties. This corporate structure comes with an increased level of tax benefits.

Restricted Shares
Shares that have a 1 year holding period before they can be sold. They are usually issued by the company directly to individuals and/or groups for payment of services, new investments or mergers.

Risk Factors
Considerations that are disclosed in the prospectus that might materially affect the company's financials, stock price, or reputation in a negative way.

Road Show
Also called the 'Dog and Pony Show'. The company gets to strut their stuff to the institutional investors on invitation by the underwriter(s). The shows are conducted in many of the major population centers throughout the country. There can also be shows overseas if there is an internation allocation in the offering.

Rule 144
A Securities and Exchange Commission (SEC) regulation that covers the selling of restricted securities issued to entities directly from the company. Shares received in this manner generally must be held for 1 year before being sold.

SEC - Securities and Exchange Commission
A government agency that regulates and supervises the securities industry. The commission adminsters federal laws, formulates and enforces rules to protect against malpractice, and seeks to ensure that companies provide the fullest possible disclosure to investors.

When a public company issues additional shares to the public.

Secondary Action Track
An IPOfn report that gives short tem buy and sell signals on the secondarys that have filed to issue additional stock but have not yet been priced. This is an extremely aggressive trading program that follows proprietary IPOfn technical models. It is a very short-term trend following in nature and does not allow for trend anticipation movements in any of the stock.

Secondary Analysis
One of the IPOfn Money Managers/Traders Package reports that list secondary offerings that are scheduled to come to market with information on historical performance of the underwriter and of the specific sector.

Sector Breakdown
One of the IPOfn Money Managers/Traders Package reports that lists all IPOs and secondary's by their individual groups and brings into clear focus various market inefficiencies within those sectors.

Sector Index
One of the IPOfn Money Managers/Traders Package reports that groups the various finite business sectors into a broader sector grouping for the sake of simplicity. It accompanys the Sector Breakdown report.

Sell Side
That group of financial participants that are generating commissions as a source of income. This is most often associated with brokers.

Seller's Market
When a market cycle creates more demand for IPOs than there is actual supply. The sellers (underwriters) can increase offering prices for new issues almost at will and still have a successful offering.

Selling Concession
Commission paid to brokers to help distribute a securities offering. This cost, along with other fees, is deducted from the gross proceeds of the offering.

Selling Group
A group of brokerage firms that helps an underwriting syndicate distribute securities of a new or secondary issue to the public.

Selling Shareholder
Shareholder who chooses to sell shares of their stock. IPOfn incorporates this information as it relates to those shareholders that are selling their shares as part of the IPO or secondary offering.

Settlement Date
The date that securities must be paid for.

Any person who owns shares of a company's stock.

Shelf Filing
A Securities and Exchange Commission registration that carries the right for a company to sell additional securities at some unspecified future date. These transactions can take many months to complete but can come to completion with little if any notice to the public at large. It is a favorite of institutions to be done directly to them in the form of a block trade.

SIC Code
Security Industry Code. A 4 digit code that specifies the sector specific industry that a company falls into.

Soft Dollar
Payments made for research and brokerage services that are generated from commissions.

Companies that take an existing internal operation within the parent company structure and allow it to stand on its own. The parent company may offer IPO shares in the market to new investors as a means of enhancing shareholder value for those that own shares in the parent company.

Spot Secondary
A secondary offering made without a registration statement usually placed to a small number of institutions.

A group of investment bankers (brokerage firms) that underwrites and distributes a new securities issue.

Syndicate Bid
The price that the original syndicate is willing to pay for stock in the aftermarket. Generally this is done to try and stabilize and/or support an issue. Selling stock to the syndicate may come with a penalty for having sold the stock back to the syndicate.

Syndicate Manager
The lead underwriter who, among other things, is in charge of organizing the syndicate, distributing member participation shares, and making stabilizing transactions once the new issue begins to trade.

Syndicate Package
An IPOfn fax report that is taylored to the sell side of the new issue market. 3 different segments covering and alphabetical, calendar and participating underwriters listings are included. Unlike the regular fax packages available to only the buy side, this package does not include and opening premium projections.

Syndicated Sale
An underwriting that is distributed to the syndicate participants and members of the selling group.

An advertisement placed in print media, usually in the 'Wall Street Journal' that serves as an official advisory of a securities offering having been completed for a company. It lists all the managers and co-managers who participated in the event. Managers are at the top and members of the selling group are shown alphabetically signifying decreasing levels of participation in the offering.

Trade Date
The day a securities transaction is negotiated and executed.

An allocation made to a geographic region. Traditional references are for overseas allocations through an 'international tranche' but there may be various sub-tranches to different regions around the world.

Treasury Stock
Stock a company issues then buys back, at which time it is placed in the company's treasury, where it earns no dividends and carries no voting priviledges.

Investment bankers that assume the risk of buying new issues of securities from a corporation and distributes them to the public. The underwriter will profit from the fees generated by the offering which are borne completely by the issuing company.

A group of securities, generally from the same company, that are bundled together and sold as a single piece. They usually consist of shares of common stock plus shares of warrants.

Use of Proceeds
How the company plans to use the monies it generated from an IPO or Secondary.

The initial measure of what a company expecting to come public is worth that is used for consideration of whether the company is fairly valued. Depending on market conditions, this value can be revised up or down by changing the expected price range for the IPO.

Venture Capital
Often referred to as 'seed money'. This is money loaned to the company in its earliest stages of development. Security for that money will carry a high price tag, at the company's expense, as the justification is that high risk on the part of the lender yields high rewards. Representation on the board and significant equity ownership are within reason. This procedure is generally a last resort to keep a new company operational.

Greater than normal movement in the price of a stock from its high and low. This term usually refers to intraday moves but can also apply to weekly price movements or longer periods.

A company issued certificate that represents an option to buy a certain number of stock shares at a specific price before a predetermined date. Having a value of its own, it can be traded on the open market.

Week Due
The week a security is expected to officially be price and open for trading.

When a company decides to not continue with its proposed offering of securities. The reasons for this can be numerous and don't always signify trouble with the proposed offering. This term in sometimes used with the word cancellation.