Date of Award

Spring 3-1964

Document Type


Degree Name

Master of Business Admin


Business Administration


The purpose of this study is to determine the adequacy and reliability of information contained in the prospectus or offering circular issued in connection with new issues of common stocks. The study will be limited to issues of corporations that are just "going public." That is, the first public offering of securities by corporations that have previously been privately owned.

The study will be made from the viewpoint of the purchaser or prospective purchaser of such securities. Since most of the firms concerned in such issues are relatively new and untried, most purchasers are seeking price appreciation rather than income. To that extent, we are concerned with "investment information" only if investment is considered with in the broad sense of being any purchase of securities for profit. Certainly few of these issues could qualify as 'investment" securities under more stringent definitions of investment. For example, Graham and Dodd define an investment operation as, "... one which, upon thorough analysis, promises safety of principal and satisfactory return."1 In purchasing first public offerings one must usually forego maximum safety in search of maximum profits. If this narrow definition of investment is accepted, this study will be concerned primarily with the use of the prospectus or offering circular as a source of "speculative information," with speculation being defined here as the purchase of securities in the hope of profiting through price appreciation.