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A lot of Redditors hate the Reddit IPO (www.theverge.com)

submitted 4 months ago by hedge@beehaw.org to c/technology@beehaw.org

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[-] altima_neo@lemmy.zip 51 points 4 months ago

It's clearly a move for Huffman to cash out before bailing out. I wonder if things would have gone any differently with the last CEO? I forget her name.

Also buying into the stock early, seems stupid. For a company that's never been profitable, during a time of mass tech layoffs, and how the valuation of other social media has tanked after an IPO, just seems like you're gonna lose money investing in Reddit.

[-] lvxferre@mander.xyz 39 points 4 months ago

My guess is that they're offering early sales because they predict that the stock value will tank after the public offering, so this way there's a slightly higher margin of profit for the current shareholders. If that's correct then it's completely scummy. (i.e. extremely typical for Reddit)

Another possibility is that they're trying to "force" power users to be more cooperative towards the platform, by giving them a financial incentive to do so - "if you shit here you'll be tanking your own shares".

[-] jarfil@beehaw.org 7 points 4 months ago

Stock options: "if you make the thing work, you'll be able to cash in on the stock price increase"

Pre-sale: "pay us now, find about later"

One incentivizes cooperation, the other can be a way to get support from large investors to grow a new business... or a scam to cash out from a 19 year old unprofitable one.

[-] A1kmm@lemmy.amxl.com 5 points 4 months ago

Nothing like investors who they perceive will be less rational, and will buy / not sell at a price above what the fundamentals suggests is rational.

It could pay off for Reddit if they get a short squeeze - non-institutional investors might be slower to sell, and I bet a lot of people will be shorting the stock unless the IPO price is really low.