"Pathfinder prospectus" Definition
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 Glossary   >   P   >   "Pathfinder prospectus" Definition   

        Pathfinder prospectus

A prospectus published by a company prior to flotation on the stock market which contains information about the company and the offer, but which leaves out details of the offer price, prospective yield and P/E ratio. The missing information is filled in just before the full prospectus is published.Companies send out pathfinder prospectuses to potential investors to build interest in the flotation in advance. The reason they leave the price blank is that they want as little time to elapse between announcement of the price and the closing date for applications - the nightmare scenario is to fix an offer price of, say 100p, and then watch the market collapse over the next few weeks, guaranteeing that the issue will flop. (This happened in 1987 when the government sold its Ј7.2 billion stake in BP right at the time of the stock market crash, and underwriters had to pick up massive tranches of unsubscribed stock at above-market prices).

Pathfinder prospectus


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Pathfinder prospectus - A prospectus published by a company prior to flotation on the stock market which contains information about the company and the offer, but which leaves out details of the offer price, prospective yield and P/E ratio. The missing information is filled in just before the full prospectus is published.Companies send out pathfinder prospectuses to potential investors to build interest in the flotation in advance. The reason they leave the price blank is that they want as little time to elapse between announcement of the price and the closing date for applications - the nightmare scenario is to fix an offer price of, say 100p, and then watch the market collapse over the next few weeks, guaranteeing that the issue will flop. (This happened in 1987 when the government sold its Ј7.2 billion stake in BP right at the time of the stock market crash, and underwriters had to pick up massive tranches of unsubscribed stock at above-market prices).


Pathfinder prospectus : a prospectus published by a company prior to flotation on the stock market which contains information about the company and the offer, but which leaves out details of the offer price, prospective yield and p/e ratio. the missing information is filled in just before the full prospectus is published.companies send out pathfinder prospectuses to potential investors to build interest in the flotation in advance. the reason they leave the price blank is that they want as little time to elapse between announcement of the price and the closing date for applications - the nightmare scenario is to fix an offer price of, say 100p, and then watch the market collapse over the next few weeks, guaranteeing that the issue will flop. (this happened in 1987 when the government sold its Ј7.2 billion stake in bp right at the time of the stock market crash, and underwriters had to pick up massive tranches of unsubscribed stock at above-market prices).