There are lots of SEC forms that investors have to wade through, but few are as important as the SEC Form S-1, which is generally filed by companies in anticipation of their initial public offering.
What is SEC Form S-1?
The purpose of the SEC Form S-1 is to register a company's securities prior to listing them on a public exchange, such as the New York Stock Exchange. In doing so, the S-1 provides the SEC and prospective investors with a detailed look at the company's business, financial statements, potential risks, and plans for the cash from the public offering.
In some ways, it's similar to the kinds of information found in an already-public company's SEC Form 10-K, the annual filing that contains fully audited financial results and conditions for each company's fiscal year.
Sometimes the information in the S-1 may need to be changed (which is often the case if the share-offering price or quantity changes before IPO). If this happens, then a company would file an SEC Form S-1/A, which is an amendment to the S-1.
How can you use Form S-1?
If you're interested in investing in a company at its IPO or soon thereafter, the Form S-1 is typically the most efficient way to get concrete information about it. The form should offer historical sales and profitability information, as well as balance-sheet and asset data. You can also learn how much of the company will be offered to the public, and how much will be retained by the existing owners of the private company.
Where do you think we get our info?
SEC filings like the S-1 are great resources. They are an important data source for almost every financial article you read on this site, whether it's from the S-1 for the next hot (or not) IPO, earnings updates and analyses from quarterly 10-Q or annual 10-K filings, or those cool 13-F filings that disclose what the big-name investors such as Warren Buffett and Carl Icahn are doing.
While we want you to keep reading our articles, our mission at The Motley Fool is helping the world invest better; a big part of that is knowing your own way around the financial reports of the companies you invest in. While the analysis and insight that we provide can be an important part of your learning process, we must each draw our own conclusions. The more you know about the companies you follow, the better your conclusions about their suitability as investments.