Overhyped Valuations Unusually high valuations compared to industry peers may indicate inflated expectations and potential overpricing of the IPO shares.
Complex Financial Statements If financial reports are overly complicated or lack transparency, it could signal accounting manipulation or hidden liabilities.
Heavy Insider Selling When company insiders offload a significant portion of their shares, it may reflect low confidence in the firm’s future.
Vague Business Model A prospectus with unclear business plans or unrealistic growth projections often signals weak fundamentals or poor management vision.
Pending Legal or Regulatory Issues Ongoing investigations, lawsuits, or compliance gaps can lead to reputational and financial risks post-IPO.