After years of speculation, Facebook—the online social network that Mark Zuckerberg founded in his Harvard dorm room in 2004—finally filed the papers for its initial public offering earlier this month. The IPO is expected to raise US$5 billion for the company later this spring, as investors rush to buy shares in the company available for the first time on the open market.
This standard S-1 form, filed with the U.S. Securities and Exchange Commission on Feb. 1, requires Facebook to disclose the risks the company has identified that could impede the success of its business—a task that filled 22 pages. Even the summary of those risk factors on page 5 of the form makes sobering reading for anyone considering buying a chunk of the social network. There’s still a lot to like about Facebook—but it’s no sure thing.
Here are nine reasons to be wary.