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Just curious - how's a raw SEC filing preferable to a reliable article summarizing it in non-legalese, providing context with the competition, etc. Other than

Just curious - how's a raw SEC filing preferable to a reliable article summarizing it in non-legalese, providing context with the competition, etc. Other than lawyers and economists, does anyone ACTUALLY prefer this raw filing? EDIT: Adding my preferred link: https://www.cnbc.com/2018/02/23/dropbox-ipo-form-s-1-prospectus-filing-full-text.html https://www.cnbc.com/2018/02/23/dropbox-ipo-form-s-1-prospec...

rainbowmverse 9y ago
The risk factors section is pretty close to a good summary.
keyboardhitter 9y ago
well, there's less chance of advertisements, and it gets to the point rather quickly i am not an economist or lawyer and prefer it i don't have to worry about a writer/editor injecting personal opinions that i could care less about
- nightcracker 9y ago
  > and it gets to the point rather quickly In a mere 160 pages. Unless you know what to look for it most certainly does not get to the point rather quickly.
  - keyboardhitter 9y ago
    then i guess i know what to look for to satisfy myself, I'm not speaking for everyone here, just responding to OP's question
  - tomrod 9y ago
    Learning curves can have solid payoff.
teej 9y ago
I always find juicy information in the S1 that doesn't get reported on right away. Off the top of my head: * Reliance and risks of Zynga in the Facebook S-1 * Customer acquisition costs in the Blue Apron S-1 * Growth specifics and positioning of algorithms in the StitchFix S-1 * Infrastructure costs in the Snapchat S-1 Besides, an S-1 filing is not written in legalease, it's written in plain language. One of the target audiences is street investors so it's meant to be accessible. I'm looking forward to digging into this one.
- swrobel 9y ago
  Give us the dirt on this one!
  - teej 9y ago
    There's nothing shocking and I think that bodes very very well for Dropbox. It looks like a solid foundation with great growth. The standouts to me were - * They cut costs on an absolute and relative basis for the last two years. This is fantastic and I hope the trend continues. * I don't understand how the $112 ARPU number foots with their pricing. They are telling a story that "teams" is driving growth but on the surface that's not reflected in the ARPU number. There's some sort of promotional discounting that's happening that isn't exposed here. I hope that they are aggressively managing their promo strategy internally because unchecked it can tank a whole company (see GAP). * No idea where they expect new users to come from given they have 500M accounts. Presumably people have 2+ dropbox accounts (personal + work). I'm interested to know how many unique active users dropbox has.
    - pvg 9y ago
      What keeps them from making money (asking, not being facetious)?
      - teej 9y ago
        If they maintain the current trend of lowering costs, keeping headcount growth in line with revenue, and continuing to achieve economies of scale in sales and marketing then they will show a profit in the next couple of years. They don't promise any of this in the S-1 because they need to be extremely conservative in their statements to the public. To be honest I'm not super familiar with the comps to know how good or bad their numbers are relative to others. But just from their own reporting they look like they are on track. That's not by accident. It's very likely that constructing this trend has been a major focus for the company in the last few years.
nabla9 9y ago
>Other than lawyers and economists, Investors. The prospectus filing is informative and you don't have to read it all to get good idea of the company. The summary from CNBC omits all the details and you can't even trust it to have the numbers correctly because if they screw it up, it has no legal consequences for them.
matthewmcg 9y ago
Lots of others have chimed in with examples of interesting tidbits to be found in "raw" securities filings that don't get included in press summaries. My personal favorite is the "efficient factoring" risk factor from an old RSA Security, Inc. 10-K[1]: The Company’s cryptographic systems depend in part on the application of certain mathematical principles. The security afforded by the Company’s encryption products is based on the assumption that the “factoring” of the composite of large prime numbers is difficult. If an “easy factoring method” were developed, then the security of the Company’s encryption products would be reduced or eliminated. Even if no breakthroughs in factoring are discovered, factoring problems can theoretically be solved by a computer system significantly faster and more powerful than those currently available. If these improved techniques for attacking cryptographic systems are ever developed, the Company’s business or results of operations could be adversely impacted. [1] https://www.sec.gov/Archives/edgar/data/932064/000095013500001420/0000950135-00-001420-d1.html https://www.sec.gov/Archives/edgar/data/932064/0000950135000...
- secfirstmd 9y ago
  Any mention of the NSA paying them to keep a dodgy RNG in there? https://www.reuters.com/article/us-usa-security-nsa-rsa/exclusive-nsa-infiltrated-rsa-security-more-deeply-than-thought-study-idUSBREA2U0TY20140331 https://www.reuters.com/article/us-usa-security-nsa-rsa/excl...
austenallred 9y ago
As a rule I prefer an original source to an interpretation of a source by someone who gets paid based on the number of clicks generated.
ovrdrv3 9y ago
This may not be a very well-received comment due to the securities fraud he has been convicted for, but in Martin Shkreli's YouTube lessons on investing (Really aimed towards future day traders / full time investors, but good points are made) he says the sec.gov site is the best place to take in content and he showed after you get used to the ( ugly ) government site layout, you can actually get to the information you need quickly. But day traders and full time investors probably fit your category of economists.
- gigogkggi 9y ago
  It's weird though that people who actually cause their investors to lose money go Scott free because of connections and to my understanding shkrelis investors all made huge profits, one going so far as to say it was the best investment of his life.law is law but clearly there is something wrong here.
ultrasaurus 9y ago
SEC filings aren't hard to read after you've been through a few and know what to look for. I was really excited to see they cut their infra costs while supporting more revenue (bottom of page 71), that bodes very well for their future prospects.
- finfun234 9y ago
  @ultrasaurus indeed. Wall street wants us to stay away from sec filings. However they are structured data. I am running a project to make sec filings easily searchable(today) and understandable(in the future) at https://www.instant10-k.com/ https://www.instant10-k.com/ We currently have 10-k & 10-Q filings for US companies and 6-K filings for foreign companies.
aaavl2821 9y ago
most everyone in the finance industry does it contains the "source" facts with limited embellishment. there are all kinds of regulations that essentially result in SEC filings being fairly standardized, limited-BS documents. you dont have to worry about distilling commentary and opinion with fact, generally for commentary and context, equity research reports are generally helpful as long as you're aware of the inherent bias. articles online can also be helpful, but generally the quality varies, and you have to spend commensurately more time fact checking once you learn how to ctrl-f the right terms and understand the general skeleton of each type of report, it is actually pretty easy to find the relevant information
torstenvl 9y ago
Primary sources are generally preferable to breathless editorializations, especially when - as here - they are not in fact written in professional jargon. Any adult of average intelligence and education should be able to get the gist of a prospectus. Feel free to link to "news" (read: opinion) posts about the filing.
anonytrary 9y ago
> Other than lawyers and economists, does anyone ACTUALLY prefer this raw filing? Apparently they do, since it's at the top of HN. If they didn't, it wouldn't be at the top. Alternatively, my guess is that many HN people saw this document, upvoted it, and then went to Google for more context.

rainbowmverse 9y ago

The risk factors section is pretty close to a good summary.

keyboardhitter 9y ago

well, there's less chance of advertisements, and it gets to the point rather quickly i am not an economist or lawyer and prefer it i don't have to worry about a writer/editor injecting personal opinions that i could care less about

nightcracker 9y ago
> and it gets to the point rather quickly In a mere 160 pages. Unless you know what to look for it most certainly does not get to the point rather quickly.
- keyboardhitter 9y ago
  then i guess i know what to look for to satisfy myself, I'm not speaking for everyone here, just responding to OP's question
- tomrod 9y ago
  Learning curves can have solid payoff.

teej 9y ago

I always find juicy information in the S1 that doesn't get reported on right away. Off the top of my head: * Reliance and risks of Zynga in the Facebook S-1 * Customer acquisition costs in the Blue Apron S-1 * Growth specifics and positioning of algorithms in the StitchFix S-1 * Infrastructure costs in the Snapchat S-1 Besides, an S-1 filing is not written in legalease, it's written in plain language. One of the target audiences is street investors so it's meant to be accessible. I'm looking forward to digging into this one.

swrobel 9y ago
Give us the dirt on this one!
- teej 9y ago
  There's nothing shocking and I think that bodes very very well for Dropbox. It looks like a solid foundation with great growth. The standouts to me were - * They cut costs on an absolute and relative basis for the last two years. This is fantastic and I hope the trend continues. * I don't understand how the $112 ARPU number foots with their pricing. They are telling a story that "teams" is driving growth but on the surface that's not reflected in the ARPU number. There's some sort of promotional discounting that's happening that isn't exposed here. I hope that they are aggressively managing their promo strategy internally because unchecked it can tank a whole company (see GAP). * No idea where they expect new users to come from given they have 500M accounts. Presumably people have 2+ dropbox accounts (personal + work). I'm interested to know how many unique active users dropbox has.
  - pvg 9y ago
    What keeps them from making money (asking, not being facetious)?
    - teej 9y ago
      If they maintain the current trend of lowering costs, keeping headcount growth in line with revenue, and continuing to achieve economies of scale in sales and marketing then they will show a profit in the next couple of years. They don't promise any of this in the S-1 because they need to be extremely conservative in their statements to the public. To be honest I'm not super familiar with the comps to know how good or bad their numbers are relative to others. But just from their own reporting they look like they are on track. That's not by accident. It's very likely that constructing this trend has been a major focus for the company in the last few years.

nabla9 9y ago

>Other than lawyers and economists, Investors. The prospectus filing is informative and you don't have to read it all to get good idea of the company. The summary from CNBC omits all the details and you can't even trust it to have the numbers correctly because if they screw it up, it has no legal consequences for them.

matthewmcg 9y ago

Lots of others have chimed in with examples of interesting tidbits to be found in "raw" securities filings that don't get included in press summaries. My personal favorite is the "efficient factoring" risk factor from an old RSA Security, Inc. 10-K[1]: The Company’s cryptographic systems depend in part on the application of certain mathematical principles. The security afforded by the Company’s encryption products is based on the assumption that the “factoring” of the composite of large prime numbers is difficult. If an “easy factoring method” were developed, then the security of the Company’s encryption products would be reduced or eliminated. Even if no breakthroughs in factoring are discovered, factoring problems can theoretically be solved by a computer system significantly faster and more powerful than those currently available. If these improved techniques for attacking cryptographic systems are ever developed, the Company’s business or results of operations could be adversely impacted. [1] https://www.sec.gov/Archives/edgar/data/932064/000095013500001420/0000950135-00-001420-d1.html https://www.sec.gov/Archives/edgar/data/932064/0000950135000...

secfirstmd 9y ago
Any mention of the NSA paying them to keep a dodgy RNG in there? https://www.reuters.com/article/us-usa-security-nsa-rsa/exclusive-nsa-infiltrated-rsa-security-more-deeply-than-thought-study-idUSBREA2U0TY20140331 https://www.reuters.com/article/us-usa-security-nsa-rsa/excl...

austenallred 9y ago

As a rule I prefer an original source to an interpretation of a source by someone who gets paid based on the number of clicks generated.

ovrdrv3 9y ago

This may not be a very well-received comment due to the securities fraud he has been convicted for, but in Martin Shkreli's YouTube lessons on investing (Really aimed towards future day traders / full time investors, but good points are made) he says the sec.gov site is the best place to take in content and he showed after you get used to the ( ugly ) government site layout, you can actually get to the information you need quickly. But day traders and full time investors probably fit your category of economists.

gigogkggi 9y ago
It's weird though that people who actually cause their investors to lose money go Scott free because of connections and to my understanding shkrelis investors all made huge profits, one going so far as to say it was the best investment of his life.law is law but clearly there is something wrong here.

ultrasaurus 9y ago

SEC filings aren't hard to read after you've been through a few and know what to look for. I was really excited to see they cut their infra costs while supporting more revenue (bottom of page 71), that bodes very well for their future prospects.

finfun234 9y ago
@ultrasaurus indeed. Wall street wants us to stay away from sec filings. However they are structured data. I am running a project to make sec filings easily searchable(today) and understandable(in the future) at https://www.instant10-k.com/ https://www.instant10-k.com/ We currently have 10-k & 10-Q filings for US companies and 6-K filings for foreign companies.

aaavl2821 9y ago

most everyone in the finance industry does it contains the "source" facts with limited embellishment. there are all kinds of regulations that essentially result in SEC filings being fairly standardized, limited-BS documents. you dont have to worry about distilling commentary and opinion with fact, generally for commentary and context, equity research reports are generally helpful as long as you're aware of the inherent bias. articles online can also be helpful, but generally the quality varies, and you have to spend commensurately more time fact checking once you learn how to ctrl-f the right terms and understand the general skeleton of each type of report, it is actually pretty easy to find the relevant information

torstenvl 9y ago

Primary sources are generally preferable to breathless editorializations, especially when - as here - they are not in fact written in professional jargon. Any adult of average intelligence and education should be able to get the gist of a prospectus. Feel free to link to "news" (read: opinion) posts about the filing.

anonytrary 9y ago

> Other than lawyers and economists, does anyone ACTUALLY prefer this raw filing? Apparently they do, since it's at the top of HN. If they didn't, it wouldn't be at the top. Alternatively, my guess is that many HN people saw this document, upvoted it, and then went to Google for more context.