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Simple English definitions for legal terms
blue-sky
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A quick definition of blue-sky:
Term: BLUE-SKY
Definition: Blue-sky refers to the approval of the sale of securities in accordance with laws that protect investors from fraud. When a company wants to sell securities, they must follow these laws to ensure that the investment is legitimate and safe. If a security is described as blue-sky, it means that it has little value and may not be a good investment.
A more thorough explanation:
blue-sky (verb): To approve the sale of securities in accordance with blue-sky laws. For example, "The company's IPO has not yet been blue-skyed."
blue-sky (adjective): Refers to a security that has little value. For example, "Investors should be cautious when buying blue-sky stocks."
Blue-sky laws are state regulations that aim to protect investors from fraudulent securities sales. When a company wants to sell securities, it must comply with these laws by registering with the state and providing detailed information about the investment opportunity. If the state approves the sale, it is said to be "blue-skyed." The term "blue-sky" can also refer to a security that has little value or is speculative in nature. These types of investments are often risky and may not have a proven track record of success. Investors should be cautious when considering blue-sky stocks and do their research before investing.