An anonymous reader shared a report. Reddit told the world to “watch out for the monkey” in its IPO documents, albeit in less explicit terms. Simply put, the company is warning potential investors that one of its subreddits, the infamous r/WallStreetBets, can lead to extremely volatile stock prices and volume, whereas Reddit He warned them that there was little they could do. Reddit on Thursday cited r/WallStreetBets as one of the potential risks of investing in the company in its S-1 form, citing a year in which retail investors have banded together to drive up the price of the struggling company in 2021. mentioned the role of subreddits in the meme stock boom. GameStop and AMC. At the time, the purpose of r/WallStreetBets was to trick professional Wall Street investors into losing money by betting on certain companies.
There's a good chance that the average person on r/WallStreetBets, a subreddit of 15 million retail investors who call themselves “monkeys” and “degenerates,” and other online forums will do the same with Reddit stocks. The company said it could be. Reddit writes: “Reddit's widespread recognition and brand recognition, including the popularity of r/wallstreetbets among retail investors and the direct access by retail investors to a widely available trading platform Given that our market price and trading volume are subject to change, our Class A common stock may experience extreme volatility for reasons unrelated to our underlying business, macroeconomic or industry fundamentals. there is.”
The company explained that if people are unable to sell their shares at or above the IPO price, they could lose all or part of their investment due to volatility. The long-term effects of movements like the one promoted by r/WallStreetBets have already been documented, and it's worth noting that increased interest and large investments do not necessarily lead to success for companies over time. about it.
