This is the best summary I could come up with:
Put simply, the company warned potential investors that one of its subreddits, the infamous r/WallStreetBets, could make its stock price and volume extremely volatile—and there’s little Reddit can do about it.
It’s entirely possible that the everyday people on r/WallStreetBets, a subreddit of 15 million retail investors who refer to themselves as “apes” and “degenerates,” and other online forums could do the same thing with Reddit’s stock, the company stated.
The volatility could cause people to lose all or part of their investment, the company explained, if they are unable to sell their shares at or above the IPO price.
The long-term effect of movements like those propelled by r/WallStreetBets is already documented, with the takeaway being that surges of interest and heavy investment don’t necessarily bring success to companies over time.
Furthermore, shares purchased by users and moderators will not be subject to a lockup, the period after an IPO where insiders and early investors are banned from selling their stock to prevent the price from going down.
The top post on the subreddit on Friday morning—“Reddit lists WSB as a risk factor for its IPO 😏”—had thousands of comments as of the publication of this article.
The original article contains 542 words, the summary contains 198 words. Saved 63%. I’m a bot and I’m open source!
I used to fucking hate that sub in my feed, but god bless those cappy swine
Does form an interesting premise though for a collectivist tool of anticapitalist warfare.
Firms taking short positions are some of the most low down parts of the stock and trade system, so you could cost the parasites millions and billions by organizing mass buys of stock on firms with shorted stock, and the best part is that the folks holding shorted positions can lose infinitely, so basically enough people working together would be able to pull the equivalent of stringing the leaches up by their nutsack and then dragging them around by it on a gravel pathway by horseback
Only to people that don’t realize stockbrokers are the house in the casino that is stock trading.
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Edit: 🦍
Lol in the article it says ppls proposed shotlrting Reddit stock. I love some of those apes so much, they got great ideas.
I hope they short it into oblivion and make all the tendies in the world.
Most you can short it in a day is 10 percent right? I dunno if they’re disciplined enough.
I’m retard.
What actually happened to the gamestop thing. Did the government end up getting involved and shutting it down? There was some shady shit going on for a while.
How would reddit even tank the price? Shorting is just a way for them to lose money if they are wrong.
Shady shit did go down but a lot of money was moved from the wealthy to the not as wealthy. I don’t think the government did anything except interview a few of the major players.
Every once in a while you’ll see a fancy car with a license plate that references gme, mooning, or wsb.
The GME thing resulted in lots of people losing lots of money, whereas many of them were convinced they were going to become millionaires.
The “GME thing” resulted in a couple of hedge fund firms going belly up. So yes, you are correct that a lot of people lost a lot of money. A few people did become millionaires from the fiasco.
Short selling is used when you expect a stock to drop in price. You “borrow” a stock from someone and immediately sell it for the current price. You have an agreement to return the borrowed stock to them within [x] time. So let’s say you borrow the stock and sell it for a nice even $100.
But you’re expecting the stock price to drop significantly. So when it drops to $60, you’ve now made $40. Because you sold it for $100 and now you can buy it at $60 to return it to the lender. If the price has dropped, you make money because you keep the difference between your sale price and your purchase price.
The issue with this is that your potential for loss is technically unlimited. If the price never drops, you never make money. Or even worse, if it increases, you stand to lose money. And since there’s no price cap on stocks, you can theoretically lose an unlimited amount. Since you’re legally obligated to return that stock to the person you borrowed it from, you can be forced into buying the stock for exorbitant prices if it increases.
The GameStop thing was caused by something called a short squeeze. Basically, a bunch of people expected the stock to drop, so they were all shorting it. Someone realized this, posted about it, and people started buying up all the available stock and refusing to sell. Now all of those people who had sold the stock and were hoping to buy it back cheap found that there was nobody to buy it from.
They increased their offer price. Still nobody to buy it from. They increased the offer again. Still nobody to buy it from. And as more shorts matured and more people were legally obligated to buy the stock, the more the price increased. It’s a simple supply and demand calculation: The demand was rapidly increasing as more people were legally obligated to return the stocks they had borrowed, and the supply had suddenly evaporated because people were outright refusing to sell. And this has a cascading effect, as people see the price spiking and refuse to sell because they expect it to continue to climb. This is where all the “to the moon” and rocket memes came from, because stock owners planned to hold until the price made it all the way to the moon.
Some vendors like Robinhood stopped allowing people to buy GameStop stock. The idea was that it would limit the shorters’ potential losses, by keeping the dwindling supply from being completely bought out. The hope was that once people were banned from buying more, they would begin to sell. But this only pissed a lot of people off, because it was a blatant attempt at manipulating the market. It was a blatant shield for the trust funds who had historically had a stranglehold on the markets. It was seen as the rich helping the rich, because that’s exactly what it was.
They increased their offer price. Still nobody to buy it from. They increased the offer again. Still nobody to buy it from. And as more shorts matured and more people were legally obligated to buy the stock, the more the price increased.
This is nonsense. The SEC already came out with a report confirming that the run up on GameStop wasn’t caused by shorts closing.
Hedge funds are short game stop. They are still short on GameStop. The real squeeze hasn’t happened yet. Whether it will or not is another debate.
I get all that I was there for that. But then lost interest. Wondered what happened after that.
Are people still holiding? There was talk that the government was going to allow people to settle their shorts for low prices or something. I guess people that made money was because of the bubble nature and memes of the whole thing, rather than any shorting factors.
But more importantly how does shorting hurt reddit?
I feel like this is just Reddit asking for the sub to inflate the stock like they did GameStop.
hey, thanks Reddit for giving us a deadly weapon that I’ll try to expand on myself witha singular Reddit account for a ““sting operation””
