Tuesday, July 31, 2012

Stock Talk - Facebook #1

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.

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