What may a preliminary prospectus include?

A preliminary prospectus, often referred to as a "red herring," is a key document in the process of an initial public offering (IPO). It provides essential information about the company and its proposed securities offering to potential investors, while not including final pricing details. The inclusion of key details about the company, such as its business model, management team, financial health, and the purpose of the capital being raised, establishes a foundational understanding for investors who are considering the investment opportunity.

While a summary of market trends and historical performance of existing securities may be relevant information in a broader context, they are not the primary components of a preliminary prospectus. Instead, the prospectus focuses on the specifics of the company's offering and what investors need to know before making an investment decision. It is designed to generate interest and solicit feedback from the market, allowing underwriters to adjust the offering as necessary before finalizing the details in the final prospectus.