We’ll learn more if the company files to go public and releases an S-1 prospectus. Until then, it seems like the company is still trying to find its footing and reach breakeven in the competitive social media sector. Similarly, you can invest in an ETF that owns shares of Tencent, such as most Chinese ETFs, but you’d also only be getting a minimal stake in Reddit.
Their overwhelming bullishness has fueled billions of dollars in losses for short-sellers. One bear has even stopped commenting on GameStop stock, citing harassment from some members. Reddit has not yet gone through the initial public offering (IPO) process, but the company did confidentially file to go public in December 2021. However, it has yet to move forward with its IPO as demand for new issues significantly soured in 2022 as tech stocks crashed.
- There’s no easy way to invest in Reddit right now since it’s not publicly traded.
- I honestly think that you could see a little bit of competition against some of these bigger tech players if Reddit successfully enters the market as a publicly traded entity.
- Funds offer instant diversification for your portfolio since they invest in lots of companies at once.
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Investors are eagerly awaiting more information about Reddit’s upcoming initial public offering (IPO), which is expected to take place later this year. The company filed its initial IPO paperwork with the Securities and Exchange Commission last month. In this segment of Backstage Pass, recorded on Dec. 17, 2021, Fool contributors Toby Bordelon, Jason Hall, and Rachel Warren discuss. Please search before posting to help us cut down on repetitive posts. If you are new to the markets, click here or see our resources in the sidebar. Additionally, see our quick guide on how to ask good questions and share quality content.
They, and other companies such as Bed, Bath, and Beyond, Nokia, American Airlines, and even Blockbuster (with only one physical store left in the country) have been targeted as future candidates for „short squeezes.“ On r/wallstreetbets, members frequently brag about outsize gains — and, in some cases, losses — and make a mockery out of risky trading behavior. Some forex strategies free posts garner so many upvotes they are elevated to r/popular, the constantly updated subreddit that flaunts the day’s posts with the most interaction. Members have spent the past three weeks bidding up the video game retailer GameStop, and the results have been spectacular. Shares have skyrocketed more than 1,200% since Wall Street Bets first piled in January 11.
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If you’ve spent any time online in the past few days, or seen any cable news, or if anyone in your immediate social orbit has done any of those things, you may have heard about something brewing related to the stock market and GameStop. If you’re not a finance bro or someone who has recently seen The Big Short, though, it might be difficult to figure out exactly what the deal is. We are here to talk through what in tarnation is happening and what it has to do with [checks notes] the Mets and Elon Musk. The first few days of gains saw Wall Street Bets members cheer the rally and beg more to join in. Posts made it to r/popular, Wall Street Bets members gained online infamy, more casual investors were introduced to the trend, and a cycle began.
Assuming Reddit does go public, the stock is likely to be volatile and risky. At the right price, investing in the stock makes sense, but investors should wait to see a path to profitability since that seems to be harder to achieve than the company expected. When purchasing any stock you’ll want to consider the company’s fundamentals, such as its revenue, net income and earnings per share.
Advance Publications, the parent company of publishing giant Condé Nast, also stands to receive a windfall from Reddit’s IPO, as the New York-based media company has an ownership stake in the social media site. The San Francisco-based company, which was valued at about $10 billion in a funding round in 2021, is seeking to sell about 10% of its shares in the IPO, the sources added. Read on to get a full perspective on Reddit stocks, the WSB and how memes even tie in to the latest stock market swings.
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That way, if one company performs poorly, your overall portfolio is bolstered by the performance of the other companies. Shares for GameStop, the electronics retailer that has largely struggled in recent years, have skyrocketed by nearly 2,000% since the beginning of the year. Shares were trading at around $350 on Wednesday, https://g-markets.net/ compared to less than $18 a share earlier this month — essentially creating billions of dollars in value for shareholders. The hedge fund Melvin Capital will receive a $2.75 billion investment from Citadel and Point72 Asset Management after losing roughly 30% on its GameStop short, according to The Wall Street Journal.
How Does Reddit Affect the Stock Market?
The performance of the investment would not reflect the performance of Reddit. It’s not clear how unprofitable the company is, but the rapid revenue growth is encouraging, even as Huffman seems to be struggling to get the bottom line into the black and is frustrated with the response from third-party apps. CEO Steve Huffman told The New York Times in August that the company „is still planning on going public, but we don’t have a firm timeline there yet. All good companies should go public when they can.“ It has also become popular for fueling dozens of “meme stock” rallies.
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They’re particularly big fans of electric-vehicle stocks; Tesla enjoys unique enthusiasm on the forum. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Newly public companies can be a great place to invest — with some caveats. It’s unclear how much of an effect the upheaval has had on the company’s business.
Monetizing the meme
If you’ve ever tried to crowdsource an answer to an obscure question or find cool stuff to do in a random city, you’re probably familiar with Reddit. The internet forum may feel reminiscent of a ‘90’s chatroom, but the site has a strong internet presence, an influential base of users (GameStop, ever heard of it?), and now, a path to becoming a public company. Department of Labor released its estimate-beating February jobs report.
Reddit promotes itself as „the front page of the internet.“ Part social media, part news aggregator, part discussion forum, the platform hosts a diverse set of communities ranging from r/worldnews to r/babyelephantgifs. Posts and comments are public, and those that receive the most positive votes, or „upvotes,“ from other users are featured most prominently. It’s rare that an ETF will give you significant exposure to a privately held company.
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