prospectus
noun
, prä-\
Definition of prospectus
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Examples of prospectus in a Sentence
Recent Examples on the Web
WeWork's prospectus emphasizes that 80% of members reported increased productivity after joining, and 78% of enterprise members say WeWork helped attract and retain talent. — Lucinda Shen, Fortune, "Would You Invest In WeWork? Here’s the Bull and Bear Case Before Its IPO," 1 Sep. 2019 Morningstar, gives sustainability ratings, researches fund prospectus as well as evaluates equity funds based on the ESG profiles of the companies in a portfolios. — Robert Powell, USA TODAY, "ESG funds: What you need to know about socially responsible investing," 13 June 2018 As an example, the prospectus specifically called out 8chan—a forum that inspired mass shootings in El Paso, Texas, and Christchurch, New Zealand—which Cloudflare suspended only recently, after facing heated criticism. — Robert Hackett, Fortune, "Only One Republican Supported That Divisive Election Security Bill. Here’s Why He Voted in Favor—Cyber Saturday," 17 Aug. 2019 The companies paint a rosy picture with this prospectus, says Ken Doctor, media analyst at Newsonomics. — Mike Snider, USA TODAY, "Gannett, GateHouse parent New Media offer more details, aim to offset merger concerns," 14 Aug. 2019 Included in the prospectus was another figure: a net loss of $689.7 million for the first six months of 2019. — Rachel Siegel, Washington Post, "WeWork IPO filing follows uneven road for other companies going public," 14 Aug. 2019 That idealism was reflected in the financial prospectus. — Erin Griffith, New York Times, "WeWork Takes Key Step Toward I.P.O., Citing Heady Growth and Huge Losses," 14 Aug. 2019 China General Nuclear Power Group, China's largest nuclear power enterprise and one of the world's largest, published a prospectus Wednesday morning, planning a $2.2 billion (15 billion yuan) listing on the Shenzhen stock exchange. — Laura He, CNN, "Asian stocks fall as trade worries linger before Fed's rate decision," 30 July 2019 Centri, which Ramsey operates from New York and Washington, D.C., has already raised more than $50 million to invest in low-income housing in Baltimore, Memphis and Philadelphia, according to a prospectus reviewed by The Oregonian. — oregonlive.com, "Political ties may yield taxpayer boost for private housing developers in Portland," 30 July 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'prospectus.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for prospectus
prospectus
nounFinancial Definition of prospectus
What It Is
A prospectus is a legal document issued by companies that are offering securities for sale. Mutual funds also provide a prospectus to potential clients, which includes a description of the fund's strategies, the manager's background, the fund's fee structure and a fund's financials statements.
How It Works
To get an idea of the role of the prospectus, let's assume Company XYZ is pursuing an IPO. Before launching the IPO, Company XYZ must first file a registration statement, which discloses all material information about the company, with the SEC. Part of the registration statement is the prospectus, which must be provided to all purchasers of the new issue.
After Company XYZ files the registration statement with the SEC for review, a cooling-off period begins. During this 20-day period, securities brokers can discuss the new IPO with clients, but the only information that can be distributed is the preliminary prospectus.
When the registration statement becomes effective, Company XYZ will amend the preliminary prospectus to add such important information as the offering price and the underwriting spread. This final prospectus must contain:
Description of the offering
History of the business
Description of management
Price
Date
Selling discounts
Use of proceeds
Description of the underwriting
Financial information
Risks to buyers
Legal opinion regarding the formation of the company
SEC disclaimer
When the final prospectus is released, brokers can take orders from those clients who indicated an interest during the cooling-off period. A copy of the final prospectus must precede or accompany all sales confirmations.
Why It Matters
The role of the prospectus is the make investors aware of the risks of an investment. Without this information, they would essentially have to make investments "sight unseen." This disclosure also protects the company from claims that it did not fully disclose enough information about itself or the securities in question.
Source: Investing Answers
prospectus
noun
English Language Learners Definition of prospectus
See the full definition for prospectus in the English Language Learners Dictionary
prospectus
noun
\
Legal Definition of prospectus
Note: Under the Securities Act of 1933, the prospectus is part of the registration statement that must be filed with the Securities and Exchange Commission before a security may be offered or sold to the public. The Securities Act defines prospectus broadly as “any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security.”