red herring
- noun
- /rɛd ˈhɛrɪŋ/
- Formal
:
prospecto preliminar
- The company filed a red herring with the SEC before its official IPO.
Examples
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Investors reviewed the red herring to assess the company's potential before the release of the final prospectus.
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The company submitted a red herring to the regulators, outlining the basic terms of their upcoming offering.
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Regulations require all changes between the red herring and the final prospectus be clearly disclosed.
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The company filed a red herring with the SEC last week.
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Many investors were confused by the red herring issued by the startup.
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Investors often review the red herring before deciding whether to participate in a new stock issue.
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Before the final prospectus is released, potential investors can learn about the deal from the red herring document.
Synonyms
11
8.3
A document that tells investors about a company's plan and offers shares for sale
A first draft document telling investors about a planned stock or bond sale that may change
Surface Forms
Morphology
red + herring
The literal words 'red' (a color) and 'herring' (a fish) do not signal the specialized financial meaning 'preliminary prospectus' (or the broader idiomatic sense 'distractor'), so the overall sense is not compositionally derivable. This is an idiomatic, register-specific term whose link to its meaning is historical and unpredictable, so a B1 learner knowing the constituents would not infer the MWE's meaning without prior exposure.
Etymology
Red herring in finance is a first version of a prospectus whose front page often had a big red warning that the details might change, and that red notice is why the early document got the name.