This refers to upcoming IPOs and secondary offerings. Brokerage houses have equity calendars, bond calendars and municipal calendars. Renaissance Capital was the first to offer individuals an online IPO Calendar.

Capital Markets

Another label used to describe the potential investing pool made up of money managers and investment firms that buy into initial public offerings of new stocks or bonds.


A specific type of spin-off in which the corporate parent consolidates a particular line of business and then sells that newly created subsidiary to investors (e.g. AXA SA combining its US operations into one subsidiary, AXA Equitable). In essence, the company is "carving out" a piece of its business with a specific business focus and selling it to the public to highlight the value of niche business operations within the larger company. Usually done in the form of a true spin-off with an independent board and separate financial statements, but heavy cross ownership by parent. Sometimes done in the form of a tracking stock structure (e.g. AT&T Wireless).

Class Action Suit

Litigation undertaken on behalf of shareholders against companies whose shares have declined in price, alleging misstatements or omissions in the prospectus or other material communicated to the public. These lawsuits, which are difficult to mount due to Federal legislation, are spearheaded by a handful of law firms specializing in this area and are focused on recent IPOs and technology companies.


An investment bank hired to underwrite an IPO with a less active role than a bookrunner. Co-managers will allocate far fewer shares and collect fewer fees. Like bookrunners, co-managers will usually initiate research after the quite period.


The commissions paid to brokers for buying or selling stock ranges from 3 to 5 cents a share for institutions. For individuals, broker commissions range from $5 to $10 per trade order, and many brokers even offer free trading. When institutions purchase an IPO at the offer price, they pay no commission. Instead, the underwriter charges the issuing company a gross spread, which is the difference between the public offering price and what the issuing company received. Typically, this spread is 6% to 8% of the IPO’s offering price. The profitability of doing IPOs is one important reason why investment banks focus on developing this business.


When investment bankers decide how to price an IPO, they study the valuations of similar, already public companies. These are called comparables. The pricing range indicated in the registration statement or in the prospectus reflects the proposed valuation of the IPO relative to the comparables. It is critical to select good comparables. Bankers sometimes point to comparables with high valuations, but knowledgeable investors do their own homework. If an IPO is the first company in its industry to go public, investors base a valuation on analogous companies, historical transactions of comparables, and a DCF analysis. Companies that had no direct comparables at the time they went public include Yahoo! and Amazon.

Confidential Filing

Companies may submit a draft registration statement to the SEC for confidential, non-public review prior to a public IPO filing. Companies receive feedback from SEC staff and modify the prospectus accordingly. The prospectus is then nearly finalized by the first public filing, and a company can launch its roadshow as early as 15 days later.

Contrarian Investing

The opposite of momentum investing. Contrarians stress taking long positions in stocks that are out of favor, or short positions in stocks that are in favor. Contrarians seek to build positions before a price trend develops.


The process of unwinding a short position by purchasing shares of the company sold short and returning them to the entity from which the short seller borrowed.

Crossover Investors

An investor or fund that invests in private companies in late-stage financing rounds with intent to bring the company public in the near future. Examples include Fidelity, T. Rowe Price, Wellington Management and RA Capital.

Cornerstone Investors

Institutional investors that the issuer indicates will purchase a large portion of the deal. New investors often feel more comfortable buying alongside large funds.