Glossary of Business, Corporate Finance and Investment Terms
Pink Sheets LLC, formerly the National Quotation Bureau, provides daily bid and offer quotes, electronically, from Market Makers on unlisted, OTC Stocks (pink sheets) and bonds (yellow sheets) to subscribers of the service. It is not a stock exchange.
Refers to various strategies of takeover targets to avoid a Hostile Takeover. One such strategy is a Stockholder Rights Plan. Another is the Crown Jewel Defense.
Poop and Scoop
This refers to an illegal act whereby unfavorable information about a stock is circulated on the internet and through other means in order to depress the price so it can be purchased at a low price and later resold at a profit. The opposite is called Pump and Dump.
Price Earning Ratio (P/E Ratio)
This is the price of a stock divided by its earnings per share. The P/E Ratio is also known as the multiple or Earnings Multiple. It is a measure of price paid for a share relative to the annual net income or profit earned by the corporation per share.
This is a right usually set forth in a shareholders Agreement or Articles of Incorporation giving existing owners of corporate stock the right or opportunity to purchase shares of new issues before it is offered to others. The purpose is to protect shareholders from dilution of value and control.
This is the rate that commercial banks charge their most credit worthy borrowers. It is also a base rate, from which other interest rates are calculated. For example, one borrower may be charged prime plus 1%, another prime plus 2%, etc. Every bank has its own prime rate, although the prime rate at most major banks, is the same or very close to the same. Smaller banks may have a prime rate that is higher than major bank prime.
Under SEC Rules, a Principal Shareholder owns 10% or more of the voting stock of a Registered Company.
Private Equity Fund
Generally, a limited partnership controlled by a private equity firm that acts as the general partner. The Private Equity Fund (General Partner) usually solicits investment funds from Accredited Investors and Qualified Institutional Investors for investment into various ventures.
Private Limited Partnership (PLP)
This is a limited partnership that is not registered with the SEC.
Sale of securities directly to an institutional investor such as an insurance company. A private placement does not have to be registered with the SEC if the securities are purchased for investment and not for resale to the public.
Projected financial results for a business.
Pro Forma Budget
A projected or hypothetical budget used for planning purposes.