Reddit plans to place a big chunk of its IPO shares in the hands of its users, an unusual move that could build loyalty but also comes with risk.
The company plans to reserve an as-yet-undetermined number of shares for 75,000 of its most prolific so-called redditors when it goes public next month, according to people familiar with the matter. The users will have the opportunity to buy Reddit shares at its initial public offering price before the stock starts trading, a privilege normally reserved only for big investors.
Ideally for the company and its underwriters, Reddit shares will rise in their stock-market debut, bestowing big gains on those who buy in at the IPO price. If the stock falls, however, it could anger those members of Reddit’s community—a group that, broadly speaking, hasn’t shied away from boycotts in the past.
Banks generally favor selling the bulk of an IPO to big money managers that tend to hold stocks for a relatively long time. Individual investors are viewed as more fickle and prone to selling at the first sign of weakness.
Their loyal users are the marks. Watch the rug get immediately pulled.
It won't be immediately. This is going to be a pump and dump, but I guarantee you there's going to be a set of first wave investors who watch the stock price go vertical for a few weeks at least.
Also, non-zero chance we get the kind of blatant stockmarket manipulation that gave us Tesla, Gamestop, and Best Buy short squeezes.
Prediction: Consent will be manufactured on Reddit for these marks to HODL until they’re left HODLing the bag.
The manipulation was stopping the GameStop short squeeze, not causing it. Robin Hood turned off the ability for users to buy the stock, but kept the ability to sell it, something they had never done before or after. They have heavy investments with the Hedge Funds that were losing big on the squeeze, so they stepped in illegally to stem the bleeding. The squeeze was organic, stopping the squeeze was manipulation.
The manipulation was stopping the GameStop short squeeze, not causing it.
There was manipulation on both ends. But the initial squeeze was a very deliberately orchestrated attempt by a few major holding firms - Fidelity, Blackrock, and Vanguard most notably - to inflate a bubble and organize a graceful exit from their long GME position.
Robin Hood turned off the ability for users to buy the stock
Because their parent company, Citadel, realized these other firms were fucking them with their own app.
But by then most of the damage had been done and the major stock holders had re-positioned themselves. A bunch of retail investors got caught with some of the bag, but they were incidental in the clash of industry titans.
The squeeze was organic
Anyone who points to a shift on the order of several hundred million dollars in a matter of days and says "Organic" is a sucker.
It’s hilarious how wrong all your takes are across the board. You are repeating the narrative of wall street executives and the WSJ. Are you a child?
I don’t invest or gamble whatsoever. You are just confidentially factually incorrect quite often and it’s annoying
Right back at you dude, don’t you have any more dogshit takes on ASoIaF to confidently spout despite never having read the books? This is how you are on every subject
I feel like you only do something this stupid if you don't expect your IPO to do well in a normal way.
Well, Spez is an ancrap, he might actually believe this is the 'right' thing to do lmao
He also made like 193 million last year alone, so I doubt he cares too much
Finally I will get recognition for moderating r/jailbait
75,000 Redditors are about to become even more insufferable than they already are
This seems like it will backfire hard. What counts as prolific? My account is old and it has like 600k karma as a result, but that's nothing compared to any karma farmer account that has been around for a year. Some of the most active mods who underpin the entire infrastructure and profit model of the website don't post while bot networks post 24/7. When- not if- the value of that stock plummets after the IPO, they've just pissed off who they deem to be the 75,000 most valuable users.
I'm also curious about how they will KYC and if the 75k number is accounts eligible before passing an identity audit or after. I'm pretty confident that they will ID'ing account owners before selling them any stock rights - and I know that I wouldn't want to dox my oldest accounts just for the offer.
I'm looking forward to large (if not huge) losses for IPO investors. Then a sub called something like r/EffedByRddt will be created. It will get to 10,000s of subscribers amazingly fast but Reddit admins shut it down and don't even bother to explain at all. They only make vague statements like "terms of service were broken" with zero details.
I wonder what strings might come attached to those stock or stock option offers.
Michael Brutsch about to perform a hostile board takeover and somehow implement even more open paedophilia than usual
but seriously, also could be a hilarious way to scam jannie nerds by having the IPO price be way higher than the immediate tank once market trading begins. huge rugpull potential
Sounds like their plan is to turn reddit into a GME-like event and ride the explosive wave of media about it into user growth among boomers.
Whether it goes good or bad (probably both) they'll gain from the explosive media if they can manufacture something like Gamestop but for themselves.
WSJ blocks vpns. Haha.
Reddit reportedly plans to offer a 'big chunk' of IPO shares to users - fastcompany.com
b-az-ingo
