what is mean by Red herrting

Answer Posted / chandu

A preliminary registration statement that must be filed
with the SEC(Securities and Exchange Commission)describing
a new issue of stock and the prospects of the issuing
company.

There is no price or issue size stated in the red herring,
and it is sometimes updated several times before being
called the final prospectus. It is known as a red herring
because it contains a passage in red that states the
company is not attempting to sell its shares before the
registration is approved by the SEC.

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