Initial Public Offerings

Stocks are introduced into the market through an initial public offering (IPO). In most cases, an IPO would need to be registered, which applies a set of guidelines to the offering to determine whether the offering is "fair, just and equitable." Although the "merit" system of applying those guidelines is not foolproof, fraudulent offerings are rejected and not granted registration. 

Sources of information

The prospectus is the most comprehensive source of information about an IPO. It sets out where your investment money will be used, describes the capitalization, history and management of the company and describes the cash flow system of the company. 

Periodic reports filed with the U.S. Securities and Exchange Commission have updated information about companies that register with the SEC.