Finance: What is shelf registration?

A shelf registration is a kind of public offering where banks and other institutions can offer new securities in companies without going through an IPO.

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Transcript

00:26

and other fiduciary fancy institutions can offer new securities in companies

00:32

without going through the myriad dance steps needed for a full-contact naked

00:37

IPO and usually a shelf registration applies in the situation where a company [Man discussing shelf registration in a club]

00:41

in a similar business might be offering the same product but in different

00:45

geographies like a company drilling oil pipelines in the southeast might file to [Oil pipeline appears]

00:50

raise money just from investors in that area while doing a similar offering in

00:54

the northwest in middle America and maybe even out of the country in this

00:59

situation the business dynamics are almost identical in each area because

01:03

like oil is oil right with the one exception of specific regional laws that [Wolves appear from woods]

01:08

may differ like you gotta be really careful about polluting the Everglades

01:11

in Florida and well, lakes in general and some

01:14

people care a lot about that and some people don't like people in the

01:17

northwest are a whole lot more sensitive to polluting arsenic on their moose then

01:21

are the kindly loving citizens of kamchatka in I think that's in eastern [Man appears with moose in Russia]

01:25

Russia in making this kind of shelf offering the filings are essentially in

01:30

piles on a shelf with a few pages changed for each flavor of filing you

01:34

know simplifies things a lot they are then sent out to the relevant investors

01:38

who then do their own assessments as to whether or not they want to buy in well [Woman investor looking at folder]

01:42

the investment system can come in the form of warrants, convertible bonds,

01:46

series of equities in various shapes and forms but companies appreciate the

01:50

ability to file shelf registrations because of the dramatic reduction in

01:54

paper cost lawyer fees and well, filing experiences where the auditors first

01:59

comment is you know turn your head and cough...stop polluting and you won't [Doctor asks patient to turn head and cough]

02:03

cough so much