Legal Definitions - tombstone

Tombstone

In the world of finance, a tombstone refers to a formal advertisement, typically published in financial newspapers or online, that announces a public offering of securities, such as stocks or bonds. It provides basic, factual information about the offering, including the type of security, the number of units offered, the price, and the names of the investment banks or underwriters involved in selling the securities to investors. Unlike a prospectus, a tombstone ad is not an offer to sell; rather, it serves as a public notice that an offering has occurred or is about to occur, identifying the parties involved.

• Example 1: Initial Public Offering (IPO) of a Tech Company

  Imagine a rapidly growing software company, "Quantum Innovations Inc.," decides to offer its shares to the public for the first time through an IPO. After the shares have been successfully sold, a tombstone advertisement might appear in a major financial publication. This ad would state that Quantum Innovations Inc. has completed its initial public offering of 10 million shares at $25 per share, and it would prominently list the names of the lead investment banks, such as "Global Wealth Management" and "Tech Capital Advisors," who managed the sale. This ad serves as a public record and announcement of the completed transaction.

• Example 2: Municipal Bond Issuance for Infrastructure

  Consider the city of "Greenfield" issuing municipal bonds to finance a new public park and recreation center. Once the bonds have been sold to investors, a tombstone ad could be placed in local and national financial newspapers. This ad would announce that Greenfield has successfully issued $75 million in general obligation bonds, detailing the interest rates and maturity dates, and crediting the financial institutions, like "Community Finance Group" and "Public Sector Securities," that underwrote the bond offering. This informs the public and the financial community about the successful funding of the project.

• Example 3: Corporate Debt Offering by a Manufacturing Firm

  A large industrial conglomerate, "Apex Manufacturing Co.," decides to raise capital by issuing new corporate bonds to fund an expansion of its production facilities. After the bonds are sold to institutional investors, a tombstone advertisement might be published. This ad would declare that Apex Manufacturing Co. has completed an offering of $500 million in 10-year senior notes, specifying the annual interest rate and listing the syndicate of investment banks, such as "Enterprise Capital Partners" and "Industrial Finance Solutions," that facilitated the sale. This provides a formal announcement of the new debt issuance and the financial intermediaries involved.