Assuming that the information contained in a registration statement is complete and accurate, the registration statement becomes effective:
Answer(s): D
only after the SEC specifically clears the issue in writing to the principal underwriter. The registration statement becomes effective when notice is received in writing from the SEC.
The Bubba Corporation is offering stock to the public for the first time. The registration statement lists 150,000 shares for sale at $400 per share. The company conducts business in a 100-mile radius that includes towns in two neighboring states. Which of the following information is not required in the preliminary prospectus for this offering?
the price at which the issue is offered. The offering price is usually determined on the offering date and does not normally appear in the preliminary prospectus.
Bubba Securities, Inc. offers 3,000,000 shares of Top Notch Manufacturing Corporation common stock at $27 per share. The next day an advertisement appears in the Wall Street Journal announcing the offering and listing the names of some of the underwriting firms.This ad is commonly referred to as a:
Answer(s): B
tombstone ad. Tombstone ads are used to announce new issues. They do not offer to buy or sell securities. They are informational only.
For what time period does a Form 144 remain in effect?
Answer(s): C
90 days. To avoid a forced sale, stock many be sold under Rule 144 over a 90-day period.
Bubba Corporation has 3,500,000 shares of common stock outstanding and its trading volume in the few weeks has been as follows:Week 1 - 43,000Week 2 - 30,900Week 3 - 37,500Week 4 - 42,600 Week 5 - 33,000 (the most recent week)If an affiliated person wanted to liquidate some of his holding of 100,000 shares pursuant to SEC Rule 144, how many shares could he sell?
36,000. Under Rule 144 up to one percent of the outstanding shares or the average weekly volume for the preceding four weeks, whichever is greater. The total volume for the last four seeks was 144,000 shares. The average is therefore 36,000 shares. This is greater than one percent of the shares outstanding (35,000).
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