Teaser

A teaser is a document circulated to potential buyers of a security that may be offered for sale in the future. The intent of the document is to generate interest in the investment's target market. Teasers are most commonly used by investment banks during initial public offerings or in the sale of real estate. The document, often prepared by the investment bank representing the issuing company, details information about the issuing company and investment opportunity that is designed to entice potential buyers.

The teaser's purpose is to create a demand for the security in question, and it may be followed by the prospectus, the final prospectus and the initial public offering. The teaser usually contains few details and may only highlight items that positively influence a potential buyer. For example, information on revenues may be available, but cost information may not be.

The teaser can also be used to solicit indications of interest when a company is considering an initial public offering. The investment bank can shop around the teaser and assess the market demand were the company to issue stock. If the teaser receives positive feedback, it could be an indication that the company might have a strongly sought after offering. If there is little interest, it might be a signal to the company that an initial public offering is not a good idea. Orders for securities cannot be accepted when the teaser is issued. A final prospectus must be issues regarding the investment before orders can be taken for the newly issued stock.