New issues

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5. The prospectus

Companies planning to come to market are legally obliged to publish a prospectus. You can request a copy from the sponsors or, in many cases, download one from the internet. It will give you details of

• the company directors and advisors
• key statistics relating to the issue, e.g.
  - the number of shares
  - the price
  - the market capitalization at that price
  - the proceeds the company will receive from the IPO
• the trading history of the company, usually for the past 3 years
• illustrative financial projections
• the main risk factors associated with investing in the company
• a profit and loss account
• a balance sheet
• notes to the accounts
• the executives' former directorships
• significant legal or tax matters
• how to apply for shares
• the terms of application.

1. After Sid - a short history of the new issues market 2. Do new issues offer good value? 3. Types of new issue 4. Applying via brokers and intermediaries 5. The prospectus 6. What to look for in the prospectus (1) - directors and advisers 7. What to look for in the prospectus (2) - standard company analysis 8. What to look for in the prospectus (3) - blue-sky company analysis 9. Making your application 10. Stagging 11. A word on warrants 12. A tale of two issues 13. Conclusion

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