A tombstone is a written announcement that provides investors with basic information about an upcoming public offering.
A public offer is when a company offers to sell the company’s shares in order to raise money.
The Securities and Exchange Commission (SEC) requires companies to publish advertisements as part of disclosure requirements before issuing new shares.
The tombstone announcement describes the type and number of securities offered, how they were purchased, the date of availability, the credit rating of the security, and the names of the syndicate members authorized to sell the security.
The tombstone gets its unusual name from the black border and bold black type commonly seen in print ads, which some say resembles a tomb marker.