– 52-week High/Low: The highest and lowest prices paid for a security in the last 52 weeks.
– Accredited Investor: An individual or entity meeting certain financial criteria allowing them to invest in certain securities.
– Acquisition: When a company buys some or all of another company’s ownership.
– Affiliate: A person or entity that has control or is controlled by, or is under common control with, another person or entity.
– American Depositary Receipts (ADRs): Receipts for shares of foreign companies that allow Americans to buy foreign securities at American exchanges. – Annual meetings of directors and shareholders are held each year to vote on certain matters, including the election of directors. The procedures for these meetings are outlined in the corporation’s articles of incorporation or bylaws.
– An annual report (10K) is a report providing financial information required by the SEC for all U.S. public companies to be filed annually.
– Arbitrage is a trading strategy that takes advantage of price differentials between markets for the same underlying asset. This can be a short-term strategy in liquid markets, as prices quickly correct themselves.
– Articles of Incorporation, also known as a Certificate of Incorporation or Corporate Charter, are the primary rules that govern the management and affairs of U.S. corporations. They are filed with the state in which a corporation is formed.
– Authorized capital is the aggregate number of shares of stock a corporation may issue, as set forth in its Articles of Incorporation or Corporate Charter.
– A bear hug is when a company offers to buy another company at a significant premium, often in hostile takeovers, in order to entice shareholders to vote in favor of a merger. – Bear Market: A general decline in the market causing investors to be pessimistic.
– Bid Price: The lowest price at which someone is willing to sell a security.
– Ask Price: The highest price at which someone is willing to buy a security.
– Beta Coefficient: A measure of a stock’s volatility relative to the overall market.
– Blank Check Company: A company with no specific business plan or purpose.
– Blank Check Preferred Stock: Securities with broad authority to determine rights without a shareholder vote.
– Board of Directors: Elected or appointed members that oversee a corporation’s activities.
– Bottom Fishing: Buying oversold stocks after a large market sell-off.
– Bull Market: A market with investor confidence and increasing stock prices.
– Bylaws: Written rules that govern corporations.
– Capital Stock: The total amount of stock authorized for issue by a corporation. – Capital structure includes long-term debt, short-term debt, common equity, and preferred equity.
– Certificate of Good Standing is a document that shows a company is validly existing and complying with state requirements.
– Certificated shares are represented by a stock certificate.
– Change/Percent Change shows the price change between the current price and the close from the previous trading day.
– CIK is a unique identifier assigned by the SEC to all companies that file with the SEC.
– Class Status provides information about a particular class of stock.
– Close is the price of the last sale for a security at the end of the trading day.
– Closing Bell signals the end of trading on the New York Stock Exchange and NASDAQ.
– Common Stock provides the holder with ownership and typically has voting rights.
– Company Profile gives information about a company’s status or history.
– Corporate Conversion is the change in the state of domicile of a corporation.
– Conversion Rights allow the holder of shares to convert to other shares of stock.
– Convertible Security can be exchanged for other securities of the corporation.
– Corporate Governance refers to the distribution of rights and responsibilities among different participants in a corporation. – Corporate hijacking is a form of identity theft used to gain control of a corporation.
– A CUSIP number identifies most securities, including stocks of U.S. and Canadian companies, and U.S. government and municipal bonds.
– Dead stock bounce refers to a moderate bounce in stock prices after a significant decline.
– Debt private placement is an unregistered offering where a company sells debt in the form of a note, debenture or bond.
– Depository Trust & Clearing Corporation (DTCC) is a holding company consisting of 5 clearing corporations and 1 depository.
– Dilution is the effect of reducing existing shareholders’ proportional interest in a corporation. – Direct public offering is an offering sold publicly or privately without the use of an underwriter.
– A corporation is managed by a board of directors which must consist of at least one person.
– Closing or terminating a corporation can be done by filing Articles of Dissolution or failing to file an annual report with the Secretary of State.
– Dividend is a portion of company’s quarterly profit paid to its shareholders in the form of cash or stock.
– A Dormant Issuer is a company that has become inactive with the Secretary of State where it is domiciled.
– DTC Chill is a limitation of certain services available for a security on deposit at The Depository Trust Company.
– DTC Global Lock is a complete restriction on all DTC services for a particular security on deposit at DTC.
– DTC participants are banks, broker-dealers and other firms that are approved by DTC to sponsor the DTC eligibility process for the security.
– Dually Quoted Stocks are quoted on both OTC Link and FINRA’s BB.
– Earnings Per Share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock.
– The Electronic Data Gathering and Retrieval System allows reporting companies to file reports and schedules with the SEC electronically.
– Equity financing is the sale of securities representing equity ownership of a corporation.
– Equity private placement is the raising of capital by a private placement rather than a public offering.
– Estimated Market Cap (Market Capitalization) is calculated by multiplying the number of shares outstanding times previous close price to reflect the total dollar value of the company’s outstanding shares. – Rule 15c2-11 sets requirements for over-the-counter securities quotations.
– A ‘fail to deliver’ occurs when a party in a transaction fails to meet their obligations, such as a broker not delivering sold shares.
– FINRA is an independent organization that oversees securities firms and brokers to ensure fair and honest operation of the industry.
– FINRA operates an electronic bulletin board for OTC stocks.
– Foreign ordinary shares are foreign common stock traded on U.S. markets.
– Form D is a notice filing required by the SEC for Regulation D offerings.
– Form S-1 is a general form used to register securities with the SEC under the Securities Act of 1933.
– Form S-8 is used to register securities offered to employees under certain employee benefit plans.
– Form F-1 is used by foreign issuers to register securities with the SEC under the Securities Act of 1933. – Form 8-K must be filed by companies after certain material and line item events occur and must be filed within four days of the event.
– Form 10-K is an annual report that must be filed by companies subject to the reporting requirements of the Securities Exchange Act of 1934, including disclosures about the issuer’s business, operations, management, audited financial statements, and planned future operations.
– Form 10-Q is a quarterly report that must be filed by companies subject to the reporting requirements of the Securities Exchange Act of 1934 and must include unaudited financial statements and a management discussion and analysis.
– Form 144 – Notice of Sales must be filed with the SEC when an executive officer, director, or affiliate of a company places a sell order.
– Rule 15c-211 requires that a Form 211 be filed with FINRA on an issuer’s behalf prior to a sponsoring market maker initiating quotes of the issuer’s securities.
– A forward stock split is the dividing of a company’s existing stock into multiple shares, with each stockholder receiving an additional share for each share they hold.
– A forward triangular merger is a type of merger that occurs when the subsidiary of the acquiring corporation merges with the target company.
– Free-Trading or Unrestricted Stock are securities that can be resold publicly, typically stock that has been registered with the Securities and Exchange Commission. – Generally Accepted Accounting Principles (GAAP) are the standard framework for financial accounting, including the standards, conventions, and rules accountants follow in recording and summarizing financial transactions.
– Going Public refers to the process by which a company’s shares become publicly traded.
– “Grey Market”, “OTC” or “Other OTC” refers to a security that is not currently traded on certain marketplaces, due to a lack of investor interest, company information availability or regulatory compliance.
– A trading halt is a temporary stop to trading, usually for 30 minutes, during the time when news from the issuing company is being disseminated over the news wires, giving investors an equal opportunity to evaluate news and make their buy, sell and hold decisions accordingly.
– “Hitting the Bid” or “bid whacking” means selling at the bid price.
– An Initial Public Offering (IPO) is a company’s first sale of stock to the public.
– An affiliate of, or person affiliated with, a specified person is a person that directly or indirectly controls or is controlled by, or is under common control with, the person specified.
– An issuer is a company that is making an offering or issue of its securities.
– The price at which the last trade was executed in a security is the last trade price.
– Liquidity is the ability of a security to be bought or sold without causing a significant movement in the price of the security, depending on forces like supply and demand, price transparency, trading history, market venue, market participants and freely tradable shares.
– The acceptance of a security for trading on a national securities exchange is when a security is accepted for trading on a national securities exchange. – Securities accepted for trading by a national securities exchange must meet specific listing requirements.
– The market or trading market refers to the equity market where stocks are listed or quoted.
– A market maker is a broker-dealer registered with the SEC and FINRA.
– A merger is the combining of two or more companies into one.
– Micro Cap Stocks refer to companies with a market capitalization of $50 million to $300 million.
– The Misery Index is the unemployment rate plus the inflation rate.
– The NASDAQ was the world’s first electronic stock market.
– A NASDAQ Public Shell is a public corporation with no business operations or significant assets.
– Net Dividend Yield is the value of annual dividend payments after taxes and expenses.
– The IPO is the event of a security being sold to the public for the first time.
– No Par Value Shares are shares without a designated par value.
– A non-reporting shell company is not subject to the reporting requirements of the Securities Exchange Act 1934.
– A non-trading shell company is not actively traded or is thinly traded.
– The New York Stock Exchange is a recognized and regulated national securities exchange. – NYSE AMEX Equities is the former name of the American Stock Exchange, now known as NYSE American.
– The opening bell is rung to signal the start of trading on the New York Stock Exchange and NASDAQ.
– OTC Best Bid and Offer (Ask) is calculated using bid and offer quotes in OTC Link and the FINRA BB.
– The OTC Bulletin Board, an electronic trading service controlled by FINRA, was discontinued in 2014.
– OTC Link is an electronic inter-dealer quotation system displaying quotes for many OTC securities.
– OTC Markets operates an interdealer quotation system.
– OTC Pink, operated by OTC Markets, includes the securities of some companies that are current in their reporting to the SEC or a U.S. bank, thrift, or insurance regulator.
– OTC Pink also includes companies that do not file reports with the SEC and has no financial standards or reporting requirements, with various tiers such as OTC Pink Current and OTC Pink No Information.
– OTCQB is a listing tier of OTC Markets, including issuers subject to SEC reporting requirements and paying listing fees. – OTCQX tier is for companies that are current in their reporting to the SEC or U.S. bank, thrift, or insurance regulator.
– OTC Pink Current Information is for companies following the International Reporting Standard or Alternative Reporting Standard.
– OTC Pink Limited Information is for companies with limited financial information or late filing obligations.
– OTC Pink No Information is for companies not providing disclosure to the public markets.
– OTCQX30 constituent means the security is in the OTCM QX ADR 30 Index.
– Outstanding Shares are the issued securities of a corporation.
– P/E Ratio is calculated by dividing a stock’s market price by the company’s earnings per share.
– “Painting the Tape” refers to illegal stock manipulation by a group of investors.
– “Penny stock” refers to a security issued by a very small company trading at less than $5 per share, often quoted over-the-counter. – Penny Stock Rule requires brokers to approve customer accounts for penny stock transactions and receive written agreement from the customer before making a transaction.
– Piggyback registration allows existing shares to be added to a registration statement for a different offering of shares being registered.
– A piggyback qualified security meets the frequency-of-quotation requirement and allows authorized participants to register online for the security.
– The last sale price refers to the price of the last sale for a given security at the end of the previous trading day.
– Private Placement is a securities offering not registered with the Securities and Exchange Commission.
– The Public Company Accounting Oversight Board (PCAOB) regulates auditors of publicly traded companies.
– Public Placement is an offering made to accredited investors through the use of general solicitation and/or advertising. – Quarterly Report (10Q) is a report providing unaudited financial information required by the SEC for all U.S. public companies to be filed quarterly.
– Reporting Requirements are rules under the Exchange Act that require companies with a class of securities registered under the Exchange Act to file periodic reports and filings with the SEC.
– Reverse Stock Split is a proportional reduction in the number of shares a corporation has outstanding. – Schedule 14-C is an Information Statement that must be mailed to shareholders when the issuer takes certain actions by shareholder consent without holding a meeting.
– Schedule 14-A is a Proxy Statement that notifies shareholders of matters to be voted on at an upcoming shareholder meeting.
– Schedule 14f-1 is an Information Statement that notifies shareholders when a company appoints new officers or directors, and provides background information about such persons.
– The Securities and Exchange Commission (SEC) is the primary federal regulatory agency responsible for administering federal securities laws and protecting investors against fraudulent practices in the securities markets.
– An SEC Reporting Company is an issuer with a class of securities registered under the Exchange Act, making them subject to the SEC’s periodic reporting requirements.
– The SEC can suspend a stock from trading for up to ten trading days when it serves the public interest and will protect investors.
– The Securities Exchange Act of 1934 requires SEC reporting companies to disclose information to the public about their business, operations, financial condition, and management through the Edgar database. – Seed Stockholders are initial investors in a company, often referred to as the “friends and family round”.
– The Securities Act of 1933, as amended, requires companies to give investors full disclosure of all material facts important for making an investment decision.
– A securities attorney specializes in the securities laws and works with companies to ensure compliance.
– A securities registration statement is a form filed with the Securities and Exchange Commission to register securities for sale to the public.
– A shareholder is any person, company, or institution that owns at least one share in a company.
– The Securities Act Rule 415 allows an issuer to register a new issue security without selling the entire issue at once.
– Shelf registration, under Rule 415 of the Securities Act, allows a corporation to comply with registration requirements up to 2 years before doing a public offering.
– A shelf registration statement allows companies to register a block of securities for future sale.
– A shell corporation is a corporation without active business operations or significant assets. – Short selling is a trading strategy where an investor borrows and sells a security, hoping to repurchase it at a lower price and make a profit.
– Short selling carries unlimited risk as the purchase price of a security can rise to any price point, and short sellers are subject to price manipulation schemes such as short squeezes.
– “Slap that Ask” is a trend-term used to describe a stock that is going to be bought up quickly for the asking price.
– The spread is the difference between the bid and the ask.
– A sponsoring market maker is a FINRA registered broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security.
– A privilege sold by one party to another gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price during a certain period of time or on a specific date.
– A stock symbol is a unique symbol assigned to a security by the Financial Industry Regulatory Authority to identify it for trading.
– The change in price, either up or down, is called the change in price. – Trading Ahead is an illegal practice where a specialist might buy a stock for themselves from one seller even though a better price is available from another public seller.
– Transfer Agents are the record keepers for stock ownership and transactions of an issuer.
– An organization raises investment capital from investors on behalf of entities seeking to sell securities.
– The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities.
– Uncertificated Shares of Stock are shares of a company that are issued but not represented by a stock certificate.
– A Unified Registration Statement is a state-level registration statement that allows companies to file a single statement in multiple states.
– An unsolicited quote represents an “Unsolicited Customer Order” and allows a broker to meet an exception to Rule 15c2-11.
– A conglomerate merger is a merger between two companies producing different goods or services for a specific product.
– The total number of shares traded on a given day.
– Yield is the annual rate of return on an investor’s capital investment, expressed as a percentage. – Brenda Hamilton is a securities attorney based in Boca Raton, Florida
– Contact information: (561)416-8956, email at [email protected], or visit www.securitieslawyer101.com
– The blog post is not legal or compliance advice on any specific matter and does not create an attorney-client relationship
– Prior results discussed do not guarantee similar outcomes The address for Going Public Lawyers is 101 Plaza Real South, Suite 202 North, Boca Raton, Florida 33432. They can be reached by phone at (561) 416-8956 and by fax at (561) 416-2855. Their website is www.SecuritiesLawyer101.com. The law firm specializes in Direct Public Offerings, Going Public Transactions, Going Public Law, and the EB-5 Program & Going Public. They also provide a newsletter subscription.
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