Initial public offerings inspire greed among beginning investors who hope to get in on the ground floor of a huge opportunity. The coming Twitter IPO has once again awakened avarice in the social-media world, especially now that long-suffering shareholders of Facebook (NASDAQ:FB) have finally been vindicated after the stock's huge rebound recently.
But as the following slideshow describes, Twitter carries some huge risks -- 54 to be exact, according to the company's S-1 filing with the SEC. Just as many beginning investors who bought Facebook shares found out the hard way, IPOs don't always go the way companies intend, and early shareholders can end up with nasty surprises if they're not prepared for the potential fallout. By being aware of the risks, though, you can put yourself in the best position to make an informed choice about whether to buy Twitter shares after the company goes public.
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Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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