In some market cycles, including the savage hunger for Internet-related stocks in the late 1990's, the interest in high-tech issues is so robust that "concept" or "résumé" public offerings ("Concept IPOs") are feasible. Feeding frenzies in the public market spotlight certain underwriters. These underwriters are prepared, on a best-effort basis, to agree to promote a public offering of securities in a company that has no sales and earnings. The companies have only a concept and/or the impressive résumés of its officers and directors.
Underwriters come and go; names change as some go out of business when the music stops, but a new wave seems ever ready when market conditions warrant. The prospectus of a concept offering will contain Draconian warnings that the offering is "speculative" and involves a "high degree of risk." In the appropriate market environment, however, those warnings often attract rather than repel investors. There are international variations on the theme. Some auction markets: the British Unlisted and the Vancouver Stock Exchange, for example will admit to trading shares of development-stage companies. Despite the occasional success stories, few if any experienced professionals recommend the premature public offering as a desired strategy. This practice is undesirable since the burden of public registration is so significant and the risks of failure are magnified in the public arena; there are fewer excuses and little forgiveness for red ink.