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MICROSOFT CORPORATION -- REGISTRATION STATEMENT
A1-A341 Microsoft Corporation, Form S-1, filed February 3, 1986 (Regis. No. 33-3083)
A1 Cover sheet to Form S-1
A2 Cross reference sheet ( location in prospectus of information required by items of Form S-1)
A3-A53 Preliminary prospectus dated February 3, 1986
A54-A67 Part II of Form S-1 (information not required in prospectus)
A68-A341 Exhibits to Form S-1
[set only includes exhibit index, selected corporate filings and state indemnification statute)
B1-B64 Microsoft Corporation, Amendment No. 1 to Form S-1, filed March 10, 1986
B1 Cover sheet to Amendment No. 1 to Form S-1
B2-B52 Preliminary prospectus dated March 10, 1986 [selected excerpt]
B53-B55 Part II of Amendment No. 1 to Form S-1
B56-B64 Exhibits to Amendment No. 1 to Form S-1
[set only includes exhibit index, opinion of counsel on tax matters]
C1-C86 Microsoft Corporation, Amendment No. 2 to Form S-1, filed March 13, 1986
C1 Cover sheet to Amendment No. 2 to Form S-1
C2-C53 Preliminary prospectus dated March 13, 1986
C54-C56 Part II of Amendment No. 2 to Form S-1
C57-C86 Exhibits to Amendment No. 2 to Form S-1
[exhibit index, underwriting agreement, and opinion of counsel on issuance of securities] |
REGISTRATION PROCESS - QUESTIONS
Using the Microsoft registration statement (and amendments) along with the Fortune article, answer the following questions:
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Jon Shirley
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| What did Microsoft file?
1. What form did Microsoft use in filing its registration statement? See A001.
a. Where does the 1933 Act specify the kind and nature of mandated disclosure? See 1933 Act § 7, and Schedule A. See instructions for Form S-1.
b. Why didn't Microsoft use Form S-2? What companies can use it? How is it different from Form S-1? See instructions for Form S-2.
c. Why didn't Microsoft use Form S-3? What companies can use it? How is it different from Form S-1? See instructions for S-3.
2. Where did Microsoft file its registration statement? See A001.
a. How was the filing fee computed? See 1933 Act § 6(b).
b. What is the reason for the filing? Will investors ask the SEC for copies?
3. When did Microsoft first file its registration statement? See A001.
a. Under 1933 Act § 8, when in the normal course would the registration statement become effective?
b. What is a delaying amendment? See Rule 473.
c. Did Microsoft file a delaying amendment? See A001.
d. When did the registration statement become effective? See C-1.
4. What does the SEC require be in Form S-1?
a. What parts are included in the form? See Form S-1 Instructions.
b. How do those preparing a registration statement know what information to include? See instructions for Form S-1, browse Regulation S-K.
c. What would you have done to write Microsoft's registration statement?
5. What is Part II of the registration statement? See A054-A067.
a. What information is disclosed?
b. Which directors signed? See A027, A059-A061. Why? See 1933 Act § 6.
c. Why did Gaudette and Gray sign? See 1933 Act § 6.
6. What part of the registration statement goes to investors? See A003-A053.
a. What is a "red herring" prospectus? See Item 501(c)(8) of Regulation S-K.
b. How will information on the offering be disseminated in the securities markets? See 1933 Act § 5(b)(1), Rule 430, SEC Release 4968.
c. What is the meaning of the marginal language on the side of the preliminary prospectus cover? See Rule 430.
d. Does the same marginal language appear in the March 10 and March 13 prospectuses? See B3 and C3. |
| Why did Microsoft go public?
7. Why did Microsoft decide to go public?
a. Where is this disclosed? See A009, A015.
b. Does the Fortune article give a different story?
c. What must be disclosed? See Item 4 (Part I), Form S-1; item 504, Reg S-K.
d. How much Microsoft raise by going public? How much did it cost Microsoft? See C2, C8, C54.
8. Who were the underwriters?
a. Where is the identity of the managing underwriters first disclosed? See A003, A035. Why are the managing underwriters so prominent?
b. What kind of distribution is this? Who were the members of the underwriting syndicate? Where is this first disclosed? See A035, C34, C79-C81.
c. When was the underwriting agreement signed? Who were the signatories? See C60, C79-C81.
d. Did Microsoft file the agreement among underwriters? See A069.
9. What were the terms of the offering?
a. What was the anticipated price in February? See A003. What was it on March 10? See B002. What about March 13? See C2.
b. How many shares were to be offered in February? See A003. What about March 10? See B002. In the actual offering? See C2.
c. Who are Selling Stockholders? See A032. Why did they want to sell their shares? What commitment did the Selling Stockholders make to the underwriters? See A033. Why this commitment?
d. How did Microsoft explain the increase in the number of shares to be sold by Selling Stockholders? See B030, B034.
e. Is there an informational-efficient market in Microsoft stock? How did the underwriters set the selling price? See A036, B034, C35. Is this sufficient disclosure? Compare Fortune article.
f. How did Microsoft explain the price changes and price negotiations with the underwriters? See A036, C35.
10. What was the cut for participants in the distribution?
a. What price concession did the underwriters take? See C2, C35.
b. What is the over-allotment option? See A036. To what extent did the underwriters exercise it?
c. What does it mean that the underwriters might stabilize or maintain the market price? See A004, Item 502(d) of Reg S-K.
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| What information did Microsoft provide potential investors?
11. If you were thinking of investing in Microsoft, what information would be relevant to you?
a. Where is this information in the prospectus? Can you find it?
b. Is it clear and understandable?
c. Which was more helpful in giving you an idea about Microsoft and its investment possibility -- the prospectus or the Fortune article?
d. Which was more likely to prevent Microsoft from being sued for over-selling itself -- the prospectus or the Fortune article?
e. Who was the prospectus written for? What is its purpose?
12. Where is the basic discussion of the company's business and financial prospects? See A012 through A026.
a. Is management's discussion and analysis of financial condition and results of operations useful? See A013.
b. Why is the discussion so pessimistic? See first paragraph A014.
c. Does this disclose the importance of Bill Gates to the company? Why is there additional disclosure in the first amendment? See B006.
d. Does it disclose the importance of IBM using MS-DOS? See A008, A018.
e. What kind of competition does Microsoft face? See A008, A024. Why so pessimistic? Isn't this a contradiction?
f. Is there any indication of future earnings and projections?
13. Does the prospectus describe management's experience and abilities to your satisfaction?
a. What is disclosed? See A027, A030.
b. Why might investors be interested in management's shareholdings, and transactions with the company?
c. Are management's shareholdings adequately described?
d. Is this investment risk adequately discussed? See A008.
14. What is dilution? See A011.
a. Why would investors be willing to invest if a $19 investment is diluted by $14.50?
b. What do investors care about? See A006.
15. What kind of trading market will there be in Microsoft stock?
a. Where will Microsoft stock be traded? See A006.
b. Can Microsoft's current shareholders dump their holdings into the new market? See A033.
16. Is disclosure clear concerning the company's tax status and the pending legal proceedings?
a. What is the effect of the corporation being treated as a personal holding company? See A008.
b. Does the additional disclosure required by the SEC make this more understandable or complete? See B007.
c. Does the opinion of counsel assuage your concerns? See B058. Will investors ever see this?
d. What is the nature of the SCP complaint? See A026. Are the theory and the implications adequately disclosed?
17. Does Microsoft have any long-term debt? See A012
a. Is this good or bad for equity investors?
b. Why isn't this more prominent? Is it mentioned anywhere else? |
| What was the SEC role?
18. What information is provided on the prospectus's cover page, inside front page and outside back cover pages? See A003, A004, A053, and instructions for Form S-1, items 501 and 502 of Reg S-K.
a. What securities are being registered by this registration statement? See A003.
b. Why must Microsoft disclaim that the SEC has passed on the securities? See 1933 Act § 23.
19. Is this the first offering of Microsoft's securities?
a. Has the company sold unregistered securities in the past? See Part II, A054-55.
b. What significance is there that Microsoft has issued stock pursuant to a stock option plan and to employees pursuant to stock purchase agreements?
c. What are "restricted securities"?
20. Does Microsoft indemnify its directors and officers against any personal liability for misstatements in the registration statement? See A054.
a. Doesn't this encourage the directors and officers to be lax? Why is this information not in the prospectus? See Item 14 (Part II), Form S-1; Item 702, Regulation S-K.
b. Is this indemnification subject to any conditions? What are they? See A054. Why are the conditions in Part II? See Item 17 (Part II), Form S-1; Item 512(i), Regulation S-K.
c. Why were the indemnification conditions not disclosed in the prospectus? See Item 12 of Form S-1
and Item 510 of Reg S-K.
21. How is the March 10 preliminary prospectus different from the February 3 preliminary prospectus? See the Fortune article.
a. Are you satisfied the SEC did a good job of reviewing the registration statement?
b. How does SEC staff compel registrants to respond to its comments?
22. Should there be reform of the SEC disclosure requirements?
a. Isn't the "prospectus" really a "retrospectus"? Should the prospectus give more future-looking information?
b. Are there any predictions about potential acquisitions? See A009. About its expected rate of growth? See A014. About future liquidity? See A015. About pending lawsuits? See A026
c. Is the prospectus format clear, usable? Who was it written for?
d. Is Microsoft a good bet?
e. Would it be better if the SEC just got out of the picture -- wouldn't a liability scheme be enough? |
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