A prospectus is prepared for public placement and contains issue parameters, information about the issuer and its activities, financial statements, information on ownership structure and governance bodies, risk description, and intended use of raised funds.
It serves as the primary source for decision-making. Marketing materials describe the issue selectively, whereas a prospectus is prepared according to established requirements, subject to registration, and the issuer is responsible for the accuracy of the information provided.
Reading the entire document is not mandatory. The most informative sections are four: risk description, where the issuer must disclose its weaknesses; purpose of fundraising; issue terms, including offer availability, amortization, and collateral; and information on ownership structure and related-party transactions.
It is also important to verify the accounting standards used in the financial statements and whether they cover the entire group. This affects the accuracy of any calculations based on them.