- cross-posted to:
- reddit@lemmy.world
- news@hexbear.net
- technology@beehaw.org
- cross-posted to:
- reddit@lemmy.world
- news@hexbear.net
- technology@beehaw.org
A lot of Redditors hate the Reddit IPO | Reddit warned us that its users were a risk factor, and boy do they sound excited about shorting its stock.::Reddit seems like a likely candidate for a meme stock. But the actual reaction suggests that r/WallStreetBets isn’t going to send the stock to the moon.
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Reminder that shorting is a high risk play and you should never make investment decisions out of spite.
The market can remain irrational longer than you can remain solvent.
Holy shit put that on a t-shirt
A reminder that the stock market and any kind of high level money market of any kind including digital money … is a rich man’s game where poor are by design destined to lose.
This is a gross over simplification. Yes, rich people can have higher risk tolerance, but that doesn’t mean people shouldn’t be going long on index funds and otherwise safe, low risk investments for retirement with what they can afford to.
And then listen to every asshole yell ‘but think of their retirements!!1!’ when the stock market shits itself.
Fuck this system. It’s original intent is way long gone, and we should stop pretending it’s helping anyone but the rich.
Yeah, well even some rich people are bored redditors.
Instructions unclear, purchased Lemmy stock using Amazon gift cards
¡Alert! Your Lemmy account may be suspended in 2 days unless you send Google Play gift card codes to me right now!
Ohh dear
Sorry, I only have Steam Gift cards… 😕
DO NOT REDEEM!!
Kitboga, this you?
100%, this is a trap being set for retail investors… not touching this even if I had a 1000ft pole.
What if you had a 1001ft pole?
That’s the whacking pole
If I had a 1001 foot pole I wouldn’t be browsing Lemmy on a Saturday night.
Then it would be called buying puts instead of shorting
Playing the stock market at all is a form of gambling. You should never gamble money you aren’t completely willing to lose.
And with shorting there’s no upper limit to what you can lose.
Not true
It is true.
You buy a stock for $30. At worst it gets to $1 and you lose $29.
You short a stock for $30. There is no upper limit to how high it can go.
In theory that’s true but you’ll get liquidated at some point.
To quote XKCD’s “Engineer Syllogism”:
-
I am good with numbers and math.
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The stock market is mostly numbers and math.
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Therefore, I would be – wait, where did all my money go?
Second premise is false
No shit Sherlock
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I think this company is deeply and uniquely incompetent and will never deliver on its objectives.
It will be about a week until options come out. A put option simulates renting 100 shares of a stock over a time period, and collecting the difference between the strike price you pay for and the lower price if there is one. If the price ends higher, you lose the rent you paid.
It would be hard to get that many separate entities to all start shorting a stock all at the same time. Especially on a well known entity that may have quite a bit of action.
No you should make investment decisioms purely for the fun of it.
Also, WSB has been wanting to short reddit for literally years, so this is barely news.
Yeah but I would short just a little, considering it will have hard time going 100x. Tbh 10x would be as difficult, but gotta play safe.
And while Huffman now thinks that Reddit as a corpus of training data for AI is valuable, he let his board member Sam Altman siphon off Reddit data for free; Altman was, and still is, the CEO of OpenAI. Altman’s also Reddit’s third-largest shareholder and owns more than twice as many shares as Huffman. Altman was the CEO of Reddit for eight days.
Say what now
Huffman also made $193 million bucks, according to the article.
How much is a dollar buck in USD?
It’s equivalent to four quarter dollar bucks.
About 1/10 of a banana
It’s just shy of a bison dollar
deleted by creator
Same as a bill.
Holy crap I did not know that! This is huge
Nobody’s doing shit with this stock.
It’s all a manufactured cover story for hedge fund/institutional manipulation to blame retail for volatility and attempted fleecing.
I’m thinking of shorting it. My friend is definitely shorting it.
I’ll be shorting it the minute outs come out. Won’t buy naked shorts though
fuck spez
fuck spez
suck fpez
Also this scrambling to make Reddit “profitable” and fucking Spez pays himself nearly $200 million a year. Fucking ridiculous. Burn it down. Build something better that hasn’t been captured by complete twats.
Nintendo CEO cutting his salary in half to avoid laying off workers after the Wii U fails versus whatever the fuck Reddit is doing
Satoru Iwata was a treasure.
Excuse me, is this for real?
How can nintendo ceo be this based
I’m guessing because Japanese people respect each other a hell of a lot more than Americans do.
I hate Huffman as much as the next guy, but the $193 million factoid is misleading clickbait nonsense. His actual salary is apparently $400k, the rest is “stock value” or whatever. Reddit is not giving 25% of its yearly revenue to the CEO.
This argument is oft repeated but It’s Bullshit. If it wasn’t valuable why is Spez okay with it?
Stock grants not being direct Income isn’t clickbait nonsense. It’s actually DELIBERATE: Spez doesn’t pay income taxes on a majority of his income. Capital gains tax has a lot of loopholes that can be exploited.
This just gives spez more money and he can cash out in the IPO.
For anyone that’s fallen for the “{wealthy person} doesn’t actually have ${huge number} because it’s stock” thing, here’s how it works.
- Wealthy people with lots of stock get access to very, very cheap credit. Not credit cards like the plebs get with a 23% APR, multi million dollar lines of credit from places like Goldman Sachs with hyper low interest rates.
- Wealthy people use that credit to live indistinguishably from a person that actually has the vast wealth that they have access to. Spez might “only” make $400k but if he has access to $50M in cheap credit it spends all the same.
- Wealthy people enjoying their access to cheap credit which spends the same as income then get to dodge income taxes and instead use the more favorable capital gains tax rates.
- As a fun bonus, they also get to go “you morons I don’t have $200M that’s all just on paper, I only pay myself $10 a year because I’m a man of the people. Now if you’ll excuse me I have to get on this private jet”
You might be wondering, why do they get this cheap credit? Because it’s a very safe bet for the financial institute, they are acting as a sort of time arbitrage mechanism for the person they are extending credit to. Since they perform this function they can be relatively assured that this will allow their client to sell their stocks, not because they have to cover expenses, but because capital gains protections and the market is favorable. It also aids in fostering a positive relationship with someone with a lot of wealth which is something financial institutes have an interest in doing.
All the actors are doing what’s in their rational self-interest. The end result is that Spez can access a large part of that $200M as liquid cash right now through credit with one hand and with the other wave you off and say “those are stocks I actually only got paid $400k”
How do they pay back those low-interest loans? I’ve always been curious.
Eventually they do need to pay back the loan, the low interest rates just make it so that they can choose to sell their stocks in the most favorable way.
This is why it makes sense for the financial institute to give out the loan in the first place.
So here’s the scenario. Let’s say you wake up tomorrow and somehow find yourself with $200M worth of stock. You are now “worth” $200M so you’d like to start living like it! You want to go buy a mansion and a nice new car and a private chef. Problem is, none of those people take stock, they all want money.
Goldman Sachs goes, “hey, I’ll loan you the money really cheap, you have to pay me back with interest, but since you have $200M in stock you can sell some of that later and pay me back”
This is great for you because you get to enjoy the mansion and new car and private chef right now. If you sold the stock right now you’d get taxed as if it were income at 38% but if you hold the stock for a few years when you sell it it will be considered capital gains and only taxed at 10% (or 15%, whichever the rate is). In addition, you don’t have to go to the stock market and sell for whatever they want right now, you can wait until the value of your stock is really high and selling is very advantageous for you.
So you do have to pay back the money, but this is still a really sweet deal because you can enjoy all the nice things right now and you get to avoid that extra ~30% you would pay in taxes if you sold it right now.
As long as the amount you saved in taxes outweighs the amount you pay in interest, this is a great deal for you. And for the financial institute it’s low risk (they extended you $10M backed by $200M in assets) and when you repay they make back enough in interest to make it worthwhile.
You get more money in your pocket, the bank gets more money in its pocket, from their point of view this was a win win. The losers are the market suffering a higher price for the stock because the supply was artificially constrained by you having access to this credit (otherwise you’d have sold shares to buy a mansion and nice car and private chef) and the taxpayer who was to shoulder a heavy tax burden because you converted your income into capital gains.
The one thing that definitely isn’t happening is Bezos or Musk or any of these other “they are only rich on paper” people clipping coupons to make ends meet. They live like rich people because the have access to plenty of money secured by their less liquid assets
This was a very informative read I understand things better now. Thanks!
Almost always executive compensation is partly stock. That doesn’t change the fact that he was compensated that much. You can’t say Elon Musk isn’t worth 200b$ because it’s not liquid.
I mean, you could say that because it’s just an estimate of what his assets are worth using the current valuations of his holdings. It’s more of a statistical average of what he could be worth then a concrete value. You can’t know the actual value unless someone makes an offer and it’s accepted. If he’s feeling pressure to sell, it will be lower than that. If he isn’t, it will be higher than that.
Whole Wall Street is built upon this “estimation” idea. No reason to nitpick about it when it comes to executive compensation.
I don’t care about my ex
While I also feel like the past is better left in the past, I am certainly not above a little schadenfreude, either.
Leopards ate my face. They are acting like this is a new betrayal that needs stopping. These are the same people who were telling us the 3rd party app changes aren’t a big deal.
I don’t get why, if these people hate Reddit so much and they want the IPO to fail, why are they still using the platform?
Once people get burned with that stock purchase email, they are going to have even more pissed off users.
FOMO.
Kept me on Reddit for a lot longer than it should have.
As someone on wsb and totally going to short the stock. They named the sub in their Ipo and that we were going to short the shit out of them.
I think it would be rude not to deliver on said promise. Honestly from what I’ve gathered on the wsb discord we kinda just wanna see reddit on fire. At least that’s the general sentiment I’ve perceived.
Also the main thought has been that as soon as they IPO they’re gonna get their board taken over and kick us out first thing.
please use puts for that
Gotta wait a week after the IPO launches for options usually.
Reddit has a near-monopoly on forum communities. It is ranked 16 on similarweb and no other competitor comes even close in terms of community size. It’s like Facebook in its dominance.
Is it though? Everyone I know aged 20 to 85 i on Facebook, some more active than others. I think I know 3 people irl that use reddit. Mind you I’m not in the US, where is more prevalent but most people I know have barely heard of reddit.
Sure, it has near monopoly on forum communities but that’s a tiny niche on the internet
Most normal people don’t admit to using Reddit, and it is not a platform you use to connect with friends in real life. Facebook has a different use case entirely.
Fair enough, still feels like we are comparing nestle with your city’s local chain of 7 minimarkets, sure I might have a few more acquaintances that use reddit but that is not 100% of them. I did a quick search from my phone, hope the sites is reliable and that I didn’t fuck up anything
According to this reddit had just under 75 million daily active users in q3 2023 https://www.statista.com/statistics/1453149/reddit-quarterly-dau-by-region/
In the same q, Facebook had https://www.statista.com/statistics/346167/facebook-global-dau/ 2110
So reddit need to grow another order of magnitude for op statement that it is comparable to fb in its dominance to become remotely true. Ideally two orders of magnitude.
I get it, we have all spent too much time on reddit for years and feel like that’s basically the whole of the internet but we are biased, there is a whole majority of people out there that don’t even know that exists
Your first sentence suggests you’re disagreeing, but nothing you said after that is incompatible with anything gp said.
They are saying it’s like Facebook in its dominance, I’m saying it’s not like Facebook, clearer now or you want me to come over with a whiteboard?
It’s where a lot of centralized communities are for niche topics, so it’s kinda hard to just drop it entirely. I haven’t posted on Reddit since moving to Lemmy, but I still lurk on some of my old subs for news and events in my city or to keep up to date on some of my hobbies. I can get memes and news here, but for the hyper-specific stuff I can either lurk on Reddit or dust off my Facebook account and try to find a relevant Group. Given the choice, I’ll take Reddit.
I don’t get why, if these people hate Reddit so much and they want the IPO to fail, why are they still using the platform?
Why do people still use Xwitter even though that entire platform has become a wasteland of bigots, assholes, and authoritarians?
bring them in to !WallStreetBets@lemmy.world
Because that’s where the convo is.
But that’s people. People make convo. We like people.
What we hate is the spider. Squatting on, manipulating, sucking the people.
Kill the spider.
Here is an alternative Piped link(s):
https://piped.video/d1vSlNz0PaA
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
Reddit’s owners are the risk factor.
No, you’re seeing this the wrong way. The iceberg stands for urgently needed structural reforms in the body of the Titanic. After the project is completed, they’ll make movies about the whole thing, you’ll see!
This pre-IPO invitation to buy is the “pump” part of pump and dump, of course everyone hates it, lol.
“I think it’s pretty cool that Reddit is doing this IPO offer to their mods and users,” a Reddit user who asked me to identify him as Kevon tells me. “It’s a nice little thank you that actually may have some monetary value.”
Kevon’s considering buying shares in the Reddit program, and may buy more once it goes public, if he feels the stock is undervalued.
Kevon sounds like a nice guy, but someone should explain to him the difference between being given options and buying shares at the IPO price. Reddit’s not doing him any favors.
Dunno…if I can buy, then dump everything 15 seconds after open, it’d probably be an easy win.
There will be a spike in the first minute of trading, then it will crash and burn.
I’d probably try something similar if I could, I’m not in the US though.
Yeah, we could ride this perhaps
Does anyone remember this?
Reddit hackers demand $4.5 million ransom and API pricing changes
Still waiting – and hoping – for the other shoe to drop.
Reddit warned us that its users were a risk factor
This means they’re positioning themselves solely as a source of training data. If their users are a risk factor, not the entire product, they’re completely uninterested in maintaining a user base and think that what they have is all they’ll ever need to sell.
I’m not sure that conclusion follows. There are many more potential future users than there are current users.
That’s the logical framing. But if they believed that, they wouldn’t call their users a risk factor; they’d be the entire product.
Google is paying something around $60m a year for AI training on reddit content
So that’s gonna be helpful lol
This feels like another “Netflix are coming after password sharing, HOW DARE THEY, EVERYONE WILL CANCEL AND THEY WILL BE BANKRUPT IN 6 MONTHS” circlejerk we recently read.
Then Netflix announces a pretty good quarter and all of a sudden these people are silent.
This feels like it’ll be that. I could be wrong. But it really feels like the echo camber will lose its mind again in a few months when the stock is priced above zero and maybe actually doing quite well.
Yep. Unfortunately companies have learnt they can get away with shitty practices. It is only thanks to government groups like the EU that some of them are being reined in, but even with them they get away with a lot.
Without them I suspect we’d already have a matrix type scenario.
The stock market doesn’t reflect reality. It reflects the confidence of rich people in certain stocks.
LOL i remember how people would rage on Reddit about Netflix and act like they were the worst company with the worst lineup in all of history. Then the following month, subscribers increased. It really became a hate meme.
Vocal minority as always
Well Netflix doesn’t publish viewership numbers, just subscribers so we have an incomplete view of how much of an impact the crackdown had
Fuck Steven Huffman.
Fuck spez
Predicting the long-term results of the reddit IPO is tricky, because it involves two large groups of highly irrational actors. 'Tis a silly place.
I speculate (hope) it will go very poorly for them. But anything could happen. They might fail upwards and print money.
Will be interesting to watch.
I’m guessing it’ll do pretty well, at least initially. There’s got to be a whole lot of investors out there who just want to get in on the new big tech IPO and still jump in. I’m not convinced the WSB crew will really move the dial. Yeah it’d be an amusing and salutary lesson if the IPO shits the bed but I can’t see it happening. I’m no expert tho!
They lost about $90M in 2023, seems like a really bad investment. But yeah, it probably will do well, at least for a while, because it’s all just gambling and BS.
