These example sentences are selected automatically from various online news sources to reflect current usage of the word 'teaser.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
A teaser is a document that advertises the potential future sale of a security.
How It Works
The teaser's job is to create demand for a security. Because it is not a prospectus, it does not usually have all the details about the offering; rather, it highlights the most positive aspects of the offering and entices readers to subscribe to the offering later.
To get an idea of the role of the teaser, let’s assume Company XYZ is pursuing an IPO. Before launching the IPO, Company XYZ must see if big institutional investors (or anybody else) want to buy the stock. They create a teaser document, which the investment bank provides to interested parties. Unlike a prospectus, which contains exhaustive detail about the offering, the prospectus is more of an advertising and promotional vehicle.
When the final prospectus is released, the investment bank can take orders from those clients who indicated an interest back when they saw the teaser.
Why It Matters
The role of the teaser is to make investors aware of the investment rather than the risks of the investment. At that stage, investors would essentially consider the investment "sight unseen." Only after the company issues a prospectus is it protected from claims that it did not fully disclose enough information about itself or the securities in question.