Start with the summary, return to the full document
A prospectus is a principal document for assessing the issuer, financial position, risks and offering terms. Presentations and social-media summaries can omit material details. Record the issuer, document date, amendments and offering structure. Turkish and U.S. formats and legal frameworks differ, so use the relevant official documents for local terms. Regulatory clearance should not be interpreted as a promise of a rising price or an endorsement of suitability.
Separate new capital from shareholder sales
Suppose 20 million new shares and 10 million existing shareholder shares are sold at TRY10. Gross offering size is TRY300 million, but TRY200 million goes to the company and TRY100 million to the selling holder before expenses. Net proceeds differ after costs. Treating the entire headline amount as the company’s investment budget misses this distinction. Read the proposed allocation to debt repayment, investment and working capital, including timing and conditions.
| Question | Section to inspect | Check |
|---|---|---|
| How does the business earn money? | Business and management discussion | Customer, product and geography concentration |
| Who receives the proceeds? | Use of proceeds and offering structure | New issuance versus shareholder sales |
| What supports the price? | Valuation and pricing documents | Earnings period, peers and debt |
| Which risks are assumed? | Risk factors and financial notes | Litigation, maturities and related parties |
| What is my post-offering ownership? | Capital and ownership | New shares, voting rights and dilution |
Examine cash conversion as well as growth
Review revenue by product, customer and geography. Concentration, slow collection or related-party sales can change the quality of growth. When profit rises but operating cash weakens, examine receivables, inventories and payment terms. Distinguish acquisitions from organic growth where possible, using comparable periods and consolidation scope. A few strong quarters do not establish that the business will perform equally well through every economic environment.
Check the assumptions behind a claimed discount
Review peer selection, the earnings period and net-debt calculation in the pricing analysis. A low multiple applied to unusually high one-off earnings may create apparent cheapness. If 80 million existing shares are joined by 20 million new shares, total shares become 100 million. A holder retaining one million shares moves from 1.25% to 1%. This illustrates ownership dilution, not necessarily an economic loss, because company proceeds and the value of new investment also matter.
Bring terms and risks together before concluding
Record debt maturities, litigation, collateral, shareholder rights and related-party dealings. Subscription, allocation and first trading are distinct events; treat dates as confirmed only when formally announced. Inspect the scope and duration of any lock-up or stabilisation arrangements without treating them as loss protection. If the business model, proceeds, pricing assumptions and three central risks cannot be explained clearly after reading, identify the missing information before reaching a conclusion.
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Sources and further reading
Numerical examples are illustrative scenarios, not company data, bank offers or current tax rates.
This content is general information and financial education. It is not personalized investment advice or a recommendation to buy or sell.