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'Secret IPO' or Not: You Won't Pay Attention to Twitter's Risks

Stocks in this article: FB GOOG P AAPL TWX

NEW YORK ( TheStreet) -- It struck me kinda funny to see the media play up the notion of Twitter's "secret IPO."

Because Twitter has less than $1 billion in revenue, the JOBS Act provides the company more time and privacy pre-IPO than Facebook (FB) and other recent market entrants. In particular, Twitter can interface with the SEC prior to releasing a public S-1 filing no later than 21 days before the initial stock offering.

In a Real Money column, Eric Jackson recounts what happened to Facebook post-IPO:

At its lows, Facebook was derided for not having a mobile strategy. It also lived in fear that it might lose its best employees, who saw their stock stuck in the mud along with their options and restricted stock units.

Right on, but it's important to recall that one of the major issues with Facebook's IPO was that the media and investors simply didn't pay enough attention to the risks section of the company's S-1 filing. How many investors, particularly at the retail level, even read the document in the first place prior to making the decision to purchase shares? How many even knew it existed and was important?

As I explain in the above-linked articles -- written in 2012 -- it wasn't as if Facebook hid anything with respect to its, at the time, immature mobile business. As All Things D's Mike Isaac noted in our Friday morning CNBC appearance, tips from friends and family and the attendant hype contributed more to FB buy decisions than close scrutiny of the books and business model.

Don't expect anything different when $TWIT or $TWTR or $BIRD or $CHRP or $CHIRP comes to be.

On the plus side -- setting revenue aside -- Twitter had a handle on mobile sooner than Facebook, largely because its platform is well-suited for it and its management team bested Zuckerberg on vision. So, while the risks might not be the same, there will be something we'll miss. And whine about after the fact.

As I explained at the end of that CNBC hit, it might be a lack of foresight with respect to how the mobile advertising landscape changes. Google (GOOG), Facebook, Twitter and Pandora (P) will not dominate these dollars forever. Expect Apple (AAPL) to come on strong, particularly with the launch of iTunes Radio. And don't ignore big media outlets such as Time Warner (TWX), who are aggressively positioning their properties to share in this rapidly-growing market.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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