I wrote about in my last post that I would dig deeper into what Facebook is all about. Unfortunately, I got way ahead of myself since Facebook does not have an annual report. Going to the company's Investor Relations this very important in determining whether a stock is worth purchasing. I went to Facebook's Investor Relations page. Something I look for is the annual report. This report is an audited report. Facebook being new does not have one of these reports. They do have a prospectus and a 10-Q, but the 10-Q financial statements are not audited. Therefore I'm not really interested in reading over them at this time. Typically I would like to view the last 3 years of the company's annual report or 10-K.
This means...I would cannot analysis whether this company is a good buy. Judging by how the stock price has tanked the way it has...it is just another reason why IPOs are risky. The stock has plummeted and is sitting around $21 as of this article.
Since I cannot read the annual report...I will not be covering this issue until I can get my hands on one of these reports.
In my next article I will talk about some basic stock trading/investing tips on being a successful analyst. I will be using the two books that I recommeneded you to read, the Intelligent Investor, and Securities Analysis by Benjamin Graham.