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submitted 9 months ago* (last edited 9 months ago) by spider@lemmy.nz to c/reddit@lemmy.ml

Reddit Inc.'s stock-trading enthusiasts made it a household name by backing companies that Wall Street wouldn't. For Reddit's own initial public offering, a group of them are about to flip the script.

In the days after the social-media company filed for an IPO, thousands of members of the WallStreetBets forum — which boasts around 15 million users and helped popularize meme stocks like GameStop Corp. — voted to boost a forum post about shorting the company, a sharp reversal of their typically bullish ways. Their avowed reasons varied from the company's lack of profitability to competitive concerns, and mostly centered on spite.

(paywalled on Bloomberg website)

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[-] DogPeePoo@lemm.ee 58 points 9 months ago* (last edited 9 months ago)

It’s a ruse.

This is a shitty cover story to obfuscate institutional shorting.

Wall Street Bets has been completely compromised since 2021 and its head moderator is said to work for Citadel

It’s a ruse. IPO = exit liquidity and they will blame it on “rEtaiL”

[-] Ghostalmedia@lemmy.world 23 points 9 months ago

I honestly don’t think many in WSB would be willing and or able to be approved for a margin account and to put up the collateral. It’s much easier to buy than to short.

I’m sure some will do it, but I doubt it will be a big thing from retail investors.

[-] DogPeePoo@lemm.ee 20 points 9 months ago* (last edited 9 months ago)

Yeah, Reddit was offering shares to high profile users/moderators. The CEO paid himself very near $200 million last year— and the company has never been profitable.

🚩🚩RED FLAGS 🚩🚩🚩🚩

I will stay far away from anything to do with it. (See Robinhood)

[-] photonic_sorcerer@lemmy.dbzer0.com 6 points 9 months ago* (last edited 9 months ago)

Pretty sure it was anyone who reached a certain karma threshold... I'm far from high profile and got multiple emails asking me to invest

[-] NuXCOM_90Percent@lemmy.zip 3 points 9 months ago

Think account age also had to do with it.

Been getting spammed on the email I have tied to the account I registered to squat my "real" online name. Think I made a grand total of one comment on that account something like a decade ago.

[-] nilloc@discuss.tchncs.de 1 points 9 months ago* (last edited 9 months ago)

Yeah I think it’s age too. I had 100k-ish fake internet points on a 13 year old account and got 2 messages about it, but not until last week. I think they’ve been Working their way down a list by account age.

Slightly tempted to throw a couple hundred bucks at out for lols.

I think todays the deadline though.

[-] stewie3128@lemmy.ml 5 points 9 months ago

I got a bunch of those emails too. Was not high profile, but had some karma.

Any money I put into that company via stock purchases would just line Steve Huffman's pockets during his exit ~~scam~~ plan.

[-] B0rax@feddit.de 2 points 9 months ago

They offered shares to me as well, and I am anything but high profile…

[-] DogPeePoo@lemm.ee 3 points 9 months ago

Lol They want your 💰💴💵

[-] Anticorp@lemmy.world 1 points 9 months ago

They didn't offer shares, they offered the ability to purchase shares at institutional purchase prices before the IPO opens to the general public. The price will likely surge after opening, so it's a pretty good offer.

[-] Ranvier@sopuli.xyz 8 points 9 months ago* (last edited 9 months ago)

Well they can buy puts without margin accounts, since those have a cap on the losses, which would also get more valuable if the stock price decreases. While technically a side bet, the options sellers often want to remain neutral in their risk with respect to movements of the underlying stocks, so buying options may influence stock price as well because of the downstream effects the options seller may undertake.

The expanded leverage of short term calls, though not directly buying the stock, may have been one thing that helped explode the GameStop share prices, as options sellers had to buy more shares to limit the losses on calls they had sold as the price increased (a gamma squeeze).

this post was submitted on 05 Mar 2024
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