pro·​spec·​tus | \ prə-ˈspek-təs How to pronounce prospectus (audio) , prä-\
plural prospectuses

Definition of prospectus

1 : a preliminary printed statement that describes an enterprise (such as a business or publication) and that is distributed to prospective buyers, investors, or participants
2 : something (such as a statement or situation) that forecasts the course or nature of something

Keep scrolling for more

Prospectus Is a Word for the Forward-Thinking

Like prospect, prospectus looks forward. Thus, a prospectus originally outlined something that didn't yet exist, describing what it would become. This might even be a book; the great dictionary of Noah Webster, like that of Samuel Johnson, was first announced in the form of a prospectus, so that well-to-do people might actually subscribe to it—that is, pay for it in advance so that Webster would have money to live on while writing it. Soon, prospectus was being used to mean a description of a private school or college, intended to attract new students. Today the word very often means a description of a stock offering or mutual fund, whether new or not.

Examples of prospectus in a Sentence

Recent Examples on the Web

The bond’s prospectus notes Papua New Guinea ranked 135th in Transparency International’s corruption perception index last year, while homicide rates in the capital, Port Moresby, are nearly five times the global average. Manju Dalal, WSJ, "It’s a Jungle Out There: Pacific Nation Braves Jittery Frontier Bond Market," 18 Sep. 2018 The company generated revenue of $7 million in the first half of 2018 and reported a net loss of $503 million, according to its prospectus. Joanne Chiu And Trefor Moss, WSJ, "A Chinese Tesla Rival Launches $1.3 Billion U.S. IPO," 29 Aug. 2018 Cash shells are special-purpose acquisition companies that are used to provide a quick and easy route to market without having to issue a full prospectus or comply with listing rules. Nick Kostov, WSJ, "Martin Sorrell Hopes to Repeat Old Successes With New Venture," 29 May 2018 The luxury e-commerce group, which filed a preliminary prospectus with the Securities and Exchange Commission Monday, was founded a decade ago by a Portuguese businessman, is based in London and operates websites globally. Stephen Wilmot, WSJ, "The Crowded Market for Luxury Tech," 20 Aug. 2018 Still, Funding Circle said in its IPO prospectus that in its own stress tests showed returns for investors would remain positive even in an extreme economic downturn comparable with the 2008 financial crash. Philip Georgiadis, WSJ, "Investors Cool on Hotly Anticipated London FinTech IPO," 3 Oct. 2018 The setting of Pebble Beach gives his design prospectus unique context. Tamara Warren, The Verge, "Monterey Car Week is where the past and future of automobiles collide," 29 Aug. 2018 Founded in 2010, WeWork had just 30% of IWG’s revenues in 2017 and deeply negative Ebitda, according to a recent bond prospectus. Stephen Wilmot, WSJ, "Why the Property Industry Isn’t Buying WeWork," 23 May 2018 Among the majors, Sony had the largest share in the company, with about 5.7 percent, according to Spotify’s prospectus. Ben Sisario, New York Times, "As Spotify Goes Public, Sony Cashes In," 4 Apr. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'prospectus.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

See More

First Known Use of prospectus

1765, in the meaning defined at sense 1

History and Etymology for prospectus

Latin, prospect

Keep scrolling for more

Learn More about prospectus

Statistics for prospectus

Last Updated

26 Apr 2019

Look-up Popularity

Time Traveler for prospectus

The first known use of prospectus was in 1765

See more words from the same year

Keep scrolling for more

More Definitions for prospectus



Financial Definition of prospectus

What It Is

A prospectus is a legal document issued by companies that are offering securities for sale. Mutual funds also provide a prospectus to potential clients, which includes a description of the fund's strategies, the manager's background, the fund's fee structure and a fund's financials statements.

How It Works

To get an idea of the role of the prospectus, let's assume Company XYZ is pursuing an IPO. Before launching the IPO, Company XYZ must first file a registration statement, which discloses all material information about the company, with the SEC. Part of the registration statement is the prospectus, which must be provided to all purchasers of the new issue.

After Company XYZ files the registration statement with the SEC for review, a cooling-off period begins. During this 20-day period, securities brokers can discuss the new IPO with clients, but the only information that can be distributed is the preliminary prospectus.

When the registration statement becomes effective, Company XYZ will amend the preliminary prospectus to add such important information as the offering price and the underwriting spread. This final prospectus must contain:

Description of the offering
History of the business
Description of management
Selling discounts
Use of proceeds
Description of the underwriting
Financial information
Risks to buyers
Legal opinion regarding the formation of the company
SEC disclaimer

When the final prospectus is released, brokers can take orders from those clients who indicated an interest during the cooling-off period. A copy of the final prospectus must precede or accompany all sales confirmations.

Why It Matters

The role of the prospectus is the make investors aware of the risks of an investment. Without this information, they would essentially have to make investments "sight unseen." This disclosure also protects the company from claims that it did not fully disclose enough information about itself or the securities in question.

Source: Investing Answers



English Language Learners Definition of prospectus

: a printed statement that describes something (such as a new business or investment) and that is sent to people who may want to be involved in it or invest in it
chiefly British : a book or document that provides information about a school, business, etc.


pro·​spec·​tus | \ prə-ˈspek-təs How to pronounce prospectus (audio) \
plural prospectuses\ -​tə-​səz \

Legal Definition of prospectus

: a preliminary printed statement describing a business or other enterprise and distributed to prospective buyers, investors, or participants specifically : a description of a new security issue supplied to prospective purchasers and providing a disclosure of detailed information concerning the company's business and financial standing

Note: Under the Securities Act of 1933, the prospectus is part of the registration statement that must be filed with the Securities and Exchange Commission before a security may be offered or sold to the public. The Securities Act defines prospectus broadly as “any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security.”

Keep scrolling for more

More from Merriam-Webster on prospectus

Rhyming Dictionary: Words that rhyme with prospectus

Spanish Central: Translation of prospectus

Nglish: Translation of prospectus for Spanish Speakers

Comments on prospectus

What made you want to look up prospectus? Please tell us where you read or heard it (including the quote, if possible).


to mark by some ceremony or observation

Get Word of the Day daily email!

Test Your Vocabulary

Challenging Vocabulary Quiz Returns!

  • stylized drawing of woman pole vaulting across gap to get trophy
  • Which is a synonym of fuliginous?
True or False

Test your knowledge - and maybe learn something along the way.

Syn City

Test Your Knowledge - and learn some interesting things along the way.

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!