Companies that have gone public and opened themselves to scrutiny by the world can be great sources of free information. Timothy DeMello, CEO of SkyRock, in Newton, Mass., and a former stockbroker, says he readsevery new offering prospectus he can get his hands on. "I read offerings for companies such as the Franklin Mint - and you think, What does acompany that sells Rhett Butler dolls have to do with me? But it's a direct marketer of products and might have ideas about listening to customers or usingsoftware-support systems." His best ideas, DeMello says, often come from sources that appear irrelevant.

Other CEOs buy stock in public competitors to get the information those companies regularly generate about the state of the industry, their approach to themarketplace, litigation they're facing, how much they pay their executives, what their cost of goods is, who their suppliers are, and what kind of marginsthey've been getting. Even without buying stock, prospectuses are available for the asking just by calling the investor relations department of a business, or by searching the SEC's EDGAR database.

Published on: Jan 1, 1995