Shareholders Glossary
Financial communication can be defined as the set of communication activities carried out by
companies and relating to their activities, their results and their economic and financial outlook. It is
imposed by regulation (annual report, general meeting for example) and also based on a voluntary
basis (press releases, analyst presentations, roadshows…) in order to give to the market visibility of the
company and its strategy.
It is an essential element of the company's information to the market, to the public and to its
shareholders.
The communication of a listed company is full of specific financial terms and acronyms. This glossary
is intended to provide our shareholders with a basic knowledge on the most used terms.
The general definitions proposed below are valid under French law and have been developed in
support of the documents made available by the French Market Authority (AMF - http://www.amffrance.org/en_US/En-plus/Lexique.html), NASDAQ (http://www.nasdaq.com/investing/glossary/) and
Reuters (http://glossary.reuters.com/index.php?title=Main_Page).
CONTACT
Communication department
+33 (0)1 40 26 07 55
[email protected]
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AMF (Autorité des Marchés Financiers) ________________________________________________ 4
Annual Financial Statements _________________________________________________________ 4
Audit ___________________________________________________________________________ 4
Auditors _________________________________________________________________________ 4
BALO (Bulletin for compulsory legal notices) ____________________________________________ 5
Bearer shareholder ________________________________________________________________ 5
Bond ___________________________________________________________________________ 5
Broker __________________________________________________________________________ 5
Capital __________________________________________________________________________ 6
Capital gain ______________________________________________________________________ 6
Capital increase ___________________________________________________________________ 6
Capital stock _____________________________________________________________________ 6
Consensus estimates _______________________________________________________________ 6
Consolidated Accounts _____________________________________________________________ 6
Corporate Governance _____________________________________________________________ 6
Deferred settlement service (SRD) ____________________________________________________ 7
Depositary _______________________________________________________________________ 7
Dilution _________________________________________________________________________ 7
Direct registered account ___________________________________________________________ 7
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) _____________________ 8
Equity ___________________________________________________________________________ 8
Euronext Compartment_____________________________________________________________ 8
Financial analyst __________________________________________________________________ 8
Financial intermediary ______________________________________________________________ 8
Float (or floating capital) ____________________________________________________________ 8
General Meeting __________________________________________________________________ 9
IFRS (International Financial Reporting Standards)_______________________________________ 10
Initial Public Offering (IPO) _________________________________________________________ 10
Insider trading ___________________________________________________________________ 10
Institutional Investors _____________________________________________________________ 10
Investment securities _____________________________________________________________ 10
ISIN Code (International Securities Identification Number) ________________________________ 10
Issuer __________________________________________________________________________ 10
Liquidity ________________________________________________________________________ 11
Managed registered account _______________________________________________________ 11
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Market capitalization______________________________________________________________ 11
Market maker ___________________________________________________________________ 11
Market value ____________________________________________________________________ 11
Nominal value of a share ___________________________________________________________ 11
NYSE Euronext ___________________________________________________________________ 11
Par value _______________________________________________________________________ 12
Preferred stock __________________________________________________________________ 12
Prospectus ______________________________________________________________________ 12
Quorum ________________________________________________________________________ 12
Quotation ______________________________________________________________________ 12
Reference document ______________________________________________________________ 13
Regulated market ________________________________________________________________ 13
Roadshow ______________________________________________________________________ 13
Security ________________________________________________________________________ 14
Share __________________________________________________________________________ 14
Shareholder _____________________________________________________________________ 14
Share capital ____________________________________________________________________ 14
Share price ______________________________________________________________________ 14
Stock exchange __________________________________________________________________ 14
Stock index _____________________________________________________________________ 14
Stock market price________________________________________________________________ 14
Treasury shares __________________________________________________________________ 15
Venture capital __________________________________________________________________ 15
Volatility _______________________________________________________________________ 15
Voting rights ____________________________________________________________________ 15
Warrant ________________________________________________________________________ 15
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A
AMF (Autorité des Marchés Financiers)
The French equivalent of the Securities Exchange Commission, the AMF has been created by the “Loi
de sécurité financière” of 1st of August 2003. It is made of the merger of the COB (Commission des
Opérations de Bourse), CMF (Conseil des Marchés Financiers) and “Conseil de discipline de la gestion
financière”. The AMF is an independent administrative authority which is responsible for protecting
the investing public, and ensuring the proper functioning of the financial markets. It draws up
regulations and many transactions, including IPO’s, must carry the approval of the AMF, known as a
“visa”.
Annual Financial Statements
The annual financial statements include the balance sheet, income statement and appendices. A public
company must publish its Annual Financial Statements within four months of the end of the fiscal year.
They must be regular and present an image, which truthfully represents the history, the financial
situation and the results of the company.
Audit
An examination of a company's accounting records and books conducted by an outside professional in
order to determine whether the company is maintaining records according to generally accepted
accounting principles
Auditors
Auditors carry out an examination of a company's accounts to ensure its financial statements have
been prepared in accordance with the laws of the jurisdiction in which it operates and to ensure they
give a true and fair view of its activities. Most companies are required to have their accounts audited,
though small and dormant companies are sometimes exempt.
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B
BALO (Bulletin for compulsory legal notices)
The BALO publishes all obligatory information notices of public companies. In particular, it publishes
announcements of financial operations, accounts and notices of Annual General Meetings.
Website: http://balo.journal-officiel.gouv.fr.
Bearer shareholder
Shareholder who is registered in an account held by a financial intermediary and who is unknown to
the company that issued the shares.
Bond
A bond is a debt investment in which an investor loans money to an entity (typically corporate or
governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
Bonds are used by these entities to raise money and finance a variety of projects and activities.
In theory, corporate bonds are supposed to be safer than stocks because they have a fixed maturity
and are repaid before any payments are made to shareholders. But if a company fails its bond holders
may suffer just as much as its shareholders.
Broker
Brokers act as agents for buyers and sellers for which they charge a commission or brokerage fee.
There are two main categories of brokers: inter-dealer brokers, who only work with specialist market
makers, and clients or agency brokers, who deal on behalf of institutional or retail clients. The terms
brokerage and brokerage house are interchangeable with broker.
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C
Capital
All the assets that belong to a company and are used for profit-making purposes.
Capital gain
Positive difference between the price received at the time a share is sold and its purchase price. When
this difference is negative, about it is called capital loss.
Capital increase
Companies increase their share capital by issuing new shares, usually for consideration in order to raise
new funds.
Capital stock
Stock authorized by a firm's charter and having par value, stated value, or no par value. The number
and the value of issued shares are usually shown, together with the number of shares authorized, in
the capital accounts section of the balance sheet.
Consensus estimates
A figure based on the combined estimates of the analysts covering a public company. Known as
consensus estimates, they provide an indication of the market's expectations about a company's net
profit or earnings per share (EPS), for example. The difference, or not, between expectations and the
actual figures allows investors and traders to put the market's reaction into perspective.
Consolidated Accounts
The accounts of the Group which include the accounts of the parent company and its subsidiaries.
Corporate Governance
Nature of the organization that governs the control and the management of a Company.
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D
Deferred settlement service (SRD)
Generally speaking, French stocks bought and sold must be settled and delivered immediately.
However, some stocks are eligible for deferred settlement. With the agreement of their financial
intermediary, investors can place orders for shares which they do not have at the time, but which must
be available on the account settlement day. Stocks eligible for deferred settlement are those which
are the most heavily traded regardless of the market on which they are listed.
Depositary
Service provider responsible for safeguarding securities and ensuring the compliance of management
decisions taken on behalf of collective investment schemes. A depositary may agree to delegate some
of its duties to another institution with the capacity to act as custody account keeper (notably, it may
ask a custodian to provide custody services). But it may not delegate the task of overseeing the
compliance of decisions taken by the management company of a collective investment scheme.
Dilution
Dilution can be caused by a change in the financial structure of a company, in particular, following a
financial operation, and it usually constitutes a lowering of the profit per share or a reduction of the
percentage of capital that a shareholder owns.
Direct registered account
The securities are directly and exclusively registered in the Company’s ledgers. This holding method
enables the shareholder to enjoy free custody rights and avoid some common management fees.
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E
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the balance between
operating income and operating charges. It differs from EBIT in so far as depreciation and amortization
are not taken into account. It is generally assimilated to trading profit.
Equity
Equity represents a major component of the balance sheet, along with such items as debt, fixed assets
and receivables. Equity is recorded on the liabilities side of the balance sheet and corresponds to the
funds received from shareholders – when the company is formed or subsequently – and to retained
earnings (i.e. profits that are not distributed as dividends). Equity corresponds to the portion of the
company’s net assets attributable to shareholders, after repaying all of the company’s creditors. Equity
is carried in the balance sheet at book value.
Euronext Compartment
Since February 2005, all companies listed on the French Main Market, Second Market (Second
Marché), and “New” Market (“Nouveau Marché”), have been subdivided into three new categories
within a single market. Listed companies are now classified in alphabetical order, and are identifiable
by a capitalisation criterion that enables investors to distinguish between:
-
F
Compartment A for capitalisations above €1 billion;
Compartment B for capitalisations between €150
million and €1 billion;
Compartment C for capitalisations below €150 million.
Nanobiotix is listed on the
regulated market of Euronext
in Paris, compartment B.
Financial analyst
A financial analyst analyses all the available information about a company or market sector, for
example, accounts, strategy and management methods. The analyst writes a report and makes
judgements about the future stock market performance of a company.
Financial intermediary
Professional that investors must go through to buy or sell on the financial market. Banks, investment
firms, online brokers and other firms may act as financial intermediaries. Depending on its status, an
intermediary may perform order reception/transmission, account keeping/custody, trading or other
services.
Float (or floating capital)
Number of shares of a company that are available for trading by the public. The “public” signifies
individuals that may buy or sell shares at any time, without having to take account of the effect of their
decision on the control of the company. Shares held by physical persons (including employees) and by
mutual funds are part of the floating capital. On the other hand, a majority shareholder’s holding is
not counted in the floating capital.
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G
General Meeting
Gathering of the shareholders and directors of an incorporated firm, required by law to be held every
calendar year. This is an important event for shareholders, who learn about the company’s position
and have a say on management. The main purpose of an Ordinary General Meeting is to approve the
annual financial statements presented by the board of directors or management board, as well as
information about the consolidated financial statements, where applicable, and the appointment or
replacement of members of the company’s governing and supervisory bodies.
The main purpose of an Extraordinary General Meeting is to allow shareholders to vote on special
resolutions concerning matters such as a change to the company’s bylaws, authorizations to issue
shares, bonds or other financial instruments…
It also exists combined General Meeting where two general meetings take place at the same time: an
Ordinary General Meeting and an Extraordinary General Meeting.
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I
IFRS (International Financial Reporting Standards)
International Financial Reporting Standards are international standards (formerly IAS – International
Accounting Standards) established by the IASB (International Accounting Standards Board). According
to European law, European companies must adhere to these standards, which have been set out in
order to standardize financial reporting methods.
Initial Public Offering (IPO)
An initial public offering is the first offering of shares to the public
Nanobiotix is listed on
by a privately or state owned company. IPOs are used by companies
Euronext
Paris
since
to raise new funds, or to achieve a listing on an exchange. The issuer
October 29, 2012.
normally offers the shares to the public through an underwriter who
promotes the offering and usually guarantees to take the shares at
a certain price to protect the issuer against adverse market movements. Also known as a flotation or
going public.
Insider trading
The exploitation of inside or privileged information to make profitable market transactions. It is illegal
and is punishable in many countries by custodial sentences or fines or both.
Institutional Investors
Institutional investors are companies, public bodies or insurance companies which invest in securities
and particularly shares in listed companies as part of their business activity. Mutual funds and pension
funds are among the biggest institutional investors.
Investment securities
Investment securities are marketable securities that represent a right or a receivable. They may be
listed on the stock market. The two main categories of investment securities are shares and bonds.
There are other categories, like investment certificates, warrants, treasury bills issued as a series, and
UCITS, etc.
ISIN Code (International Securities Identification Number)
International Securities Identification Number (ISIN), a code used to
identify a security such as a share, bond or collective investment scheme.
Euroclear, the company that acts as central securities depositary in
France, assigns ISINs to collective investment schemes and listed
companies.
Issuer
An entity that puts a financial asset in the marketplace.
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Nanobiotix ISIN code:
FR0011341205
L
M
Liquidity
The degree to which an asset or security can be bought or sold in the market without affecting the
price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or
sold are known as liquid assets.
Managed registered account
The securities are registered in the Company’s ledgers, but are held by the financial intermediary who
manages shareholder securities.
Market capitalization
Value of a company on the stock market at a given point in time, equal to the number of outstanding
shares of a company multiplied by the share price.
Market maker
A market maker is a trader who works to maintain the liquidity of the market and the continuity of
quotations. In order to do this, they permanently offer a buying and selling price for a certain quantity
of shares.
Market value
Market value is the value at which an item can be bought or sold, generally on the financial market, at
a market price as determined by supply and demand.
N
Nominal value of a share
This is the issue price selected for shares when a company is formed. The nominal value is obtained by
dividing the total issue amount by the number of shares issued. This value is therefore different from
the share’s market price. Also known as par or face value.
NYSE Euronext
NYSE Euronext is a private holding company formed from the merger of the NYSE Group, Inc. and
Euronext N.V. The company comprises six cash equity markets in five countries (Belgium, the United
States, France, the Netherlands and Portugal) and six derivatives market in six countries. NYSE
Euronext offers a wide range of financial products and services: listing of equities and other cash
products, equity derivative and fixed income products, bonds and distribution of market data.
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P
Par value
The par value (or “par”) of a share is the result of dividing the company’s share capital by the number
of shares issued.
Preferred stock
A security that shows ownership in a corporation and gives the holder a claim, prior to the claim of
common stockholders, on earnings and also generally on assets in the event of liquidation. Most
preferred stock pays a fixed dividend that is paid prior to the common stock dividend. This stock does
not usually carry voting rights. Preferred stock has characteristics of both common stock and debt.
Prospectus
Document prepared by a company for an initial public offering, any capital increases or the issue or
admission of financial securities. A prospectus must receive prior approval from the AMF. It contains
information about the company and the proposed transaction.
Q
Quorum
Minimum percentage of shares with voting rights required to be present or represented for an Annual
Shareholders’ Meeting to be validly constituted.
Quotation
Quotation or listing determines the market price for a security at a given moment.
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R
Reference document
Official document that provides investors with complete, current information about a company’s
activities, financial statements, governance, oversight and legal characteristics. The company has sole
responsibility for this document, which is registered or filed with the AMF. The AMF reviews reference
documents, particularly in the case of corporate finance transactions. The aim of the reference
document is to disseminate high-quality information to a broad audience.
Regulated market
Multilateral system that brings together multiple third-party buying and selling interests in financial
instruments within the system and in accordance with rules. A regulated market is managed by a
market operator.
Roadshow
The senior officers of companies go “on tour” at home and abroad to present their companies to
analysts and actual of potential professional investors. It forms part of a company’s regular financial
communication strategy and may also precede a financial event (IPO, capital increase, etc.).
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S
Security
The term “security” is used as a synonym for “investment security”, the category to which shares
belong, inter alia.
Share
Certificate evidencing ownership of a fraction of the capital of the company that issued it. Shares may
pay dividends and entitle the holder to vote at general meetings. They may be listed on a stock
exchange. Also known as a stock or equity.
Shareholder
Any person, company or other institution that owns at least one share of a company’s stock.
Shareholders are a company's owners. They have the potential to profit if the company does well, but
that comes with the potential to lose if the company does poorly. A shareholder may also be referred
to as a "stockholder".
Share capital
The share capital is the total of all the capital paid in by shareholders at the time the company was
established or after a capital increase.
Share price
Price at which a share is traded on a stock market (market value). The share price fluctuates daily based
on supply and demand
Stock exchange
Financial market where financial instruments such as shares and bonds are traded. The stock exchange
is one of the economy’s key sources of financing. It enables private and public companies, local
authorities and central government to raise funds to finance their investments.
Stock index
Average price of a representative sample of securities for a market, sector, etc. and showing the
general price trend for example. Euronext Paris SA computes several indices, including the SBF 120 and
the CAC 40.
Nanobiotix was added to the CAC®PME Index since June 2014. Nanobiotix is also included in the
Next Biotech Index, the unique biotech index which helps investors, fund managers and issuers to
track the performance of fast-growing biotech.
Stock market price
This is the purchase price for a share that an individual is prepared to pay to a shareholder who agrees
to sell him the share at this price. Usually, this price reflects the value of the company, based on its net
assets and forecast results; however, it may also be the result of various assessments, or be affected
by events outside the company’s control.
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T
V
Treasury shares
Shares issued in the name of the corporation. The shares are considered issued, but not outstanding.
Usually refers to stock that was once traded in the market but has since been repurchased by the
corporation. Treasury stock not considered when calculating dividends or earnings per share.
Venture capital
Investment that consists in acquiring equity interests in start-up or high-tech companies.
Volatility
Measure of the variation in a security, fund, market or index over a given period.
Voting rights
Voting rights are rights attached to shares, and allow shareholders to vote on the resolutions presented
at the Annual General Meeting.
W
Warrant
A security entitling the holder to buy a proportionate amount of stock at some specified future date at
a specified price, usually one higher than current market price. Warrants are traded as securities whose
price reflects the value of the underlying stock. Corporations often bundle warrants with another class
of security to enhance the marketability of the other class. Warrants are like call options, but with
much longer time spans-sometimes years. And, warrants are offered by corporations, while exchangetraded call options are not issued by firms.
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