Why Form S-1 matters to investors
Form S-1 and Form F-1, are vital tools for investors. Not only do they allow investors to get a better understanding of how the security being issued should work, they also provide a clearer picture of the company issuing the security.
That goes for any sort of tradable security, such as stocks, bonds, and anything else that a company might wish to list. Stocks and bonds often work differently, so it's really important to understand which is being offered and why. This will all be disclosed in the prospectus, which is a big part of Form S-1.
Before to the Securities Act of 1933, filing requirements were scant, leaving many investors in the dark as to what they were actually buying with their dollars. Although it can create a lot of paperwork (especially if an S-1 is amended several times by the company), this form gives you the very best picture of what's going on under the hood of your next stock purchase.