| 1. | a smoked herring. |
| 2. | something intended to divert attention from the real problem or matter at hand; a misleading clue. |
| 3. | Also called red-herring prospectus. Finance. a tentative prospectus circulated by the underwriters of a new issue of stocks or bonds that is pending approval by the U.S. Securities and Exchange Commission: so called because the front cover of such a prospectus must carry a special notice printed in red. |
| 4. | any similar tentative financial prospectus, as one concerning a pending or proposed sale of cooperative or condominium apartments. |
| red herring n.
[From its use to distract hunting dogs from the trail.] |
In argument, something designed to divert an opponent's attention from the central issue. If a herring is dragged across a trail that hounds are following, it throws them off the scent.
Red Herring
A preliminary registration statement that must be filed with the SEC describing a new issue of stock (IPO) and the prospects of the issuing company.
Investopedia Commentary
There is no price or issue size stated in the red herring, and it is sometimes updated several times before being called the final prospectus. It is known as a red herring because it contains a passage in red that states the company is not attempting to sell their shares before the registration is approved by the SEC.
Related Links
Don't Forget To Read The Prospectus!
IPO Basics Tutorial
See also: Gun Jumping, IPO, Issuer, Prospectus, SEC, Tombstone, Underwriting
red herring
red herring
Something that draws attention away from the central issue, as in Talking about the new plant is a red herring to keep us from learning about downsizing plans. The herring in this expression is red and strong-smelling from being preserved by smoking. The idiom alludes to dragging a smoked herring across a trail to cover up the scent and throw off tracking dogs. [Late 1800s]