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What Is an S-1 Filing?

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Form S-1 is a document companies file before they execute an initial public offering.

The reason you’ve been hearing about these forms recently is that many companies are going public through SPACs, or special purpose acquisition companies. The pandemic has put IPO plans on hold for many companies, so SPACs are swooping in to buy target companies at low prices and go public in their place.

An S-1 is filed with the Securities and Exchange Commission, the big U.S. regulatory agency that oversees publicly traded securities. The SEC is trying to ensure that companies give all of the information investors need before that company goes public.

So what’s in that S-1?

The company will disclose how many new shares of stock it is issuing, what the intended price per share will be and how much cash the company is looking to raise. Importantly, you can glean from the price per share and number of shares issued what the implied valuation is of 100% of the company's equity—very useful information to have.

The company will also say what it is using the newly raised capital for. It could be for expansionary purposes, used as extra liquidly to pay down debt, or for several other purposes.

The company will also talk about its business model, recent financial results and how its sales and profit trajectory are shaping up. It will also list key risks to the business like competition or other headwinds.

Look out for future IPOs like AirBnB and be sure to go on the company’s investor relations page to check out the S-1 when it comes out.

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