Question

What is the purpose of a "tombstone ad"? a) To inform investors an upcoming offering has...

What is the purpose of a "tombstone ad"?

a) To inform investors an upcoming offering has been canceled.
b) To inform investors of an upcoming offering. c) To inform investors an upcoming offering will be delayed for 30 days
d) To inform investors securities will be offered for sale after the company has responded to the SEC's comment letter

What is the correct answer ?

Homework Answers

Answer #1

Tombstone ads are the only form of advertising that is allowed during the cooling off period. A tombstone ad is an announcement and description of the securities to be offered. A tombstone ad lists the names of the underwriters, where a prospectus may be obtained, and a statement that the tombstone ad does not constitute an offer to sell the securities and that the offer may only be made by a prospectus. Tombstone ads are traditionally run to announce the new issue, but they are not required and do not need to be filed with the SEC.

A tombstone is a type of print notice that is most often used in the financial industry to formally announce a particular transaction, such as an initial public offering or placement of stock of a company.

b) To inform the investors of an upcoming offering

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