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As Reddit finallyfiles to go public , the company pen in itsS-1 filingthat “ meme farm animal ” schemes on r / WallStreetBets could pose a hazard to investors .
The subredditr / WallStreetBets , a community of retail traders with 15 million appendage , describes itself as being “ like 4chan found a Bloomberg Terminal . ” It ’s most well known for coordinating ashort squeezeon GameStop Malcolm stock in 2021 , a rebellious move that cost hedging finances billions of dollars . The line was so volatile , jumping more than 600 % within days , that trading was halted multiple times . Retail traders endeavor to replicate the GameStop saga by investing in other heavily shorted stocks like AMC and Bed , Bath & Beyond , solidifying this phenomenon of trading “ meme stocks , ” to mixed results .
In its S-1 filing , the company wrote : “ Given the broad knowingness and brand recognition of Reddit , including as a result of the popularity of r / wallstreetbets among retail investor , and the lineal memory access by retail investor to loosely useable trading platforms , the market price and trading bulk of our Class A common stock could get extreme excitableness for reasonableness unrelated to our underlying business or macroeconomic or industriousness fundamentals , which could have you to lose all or part of your investment if you are ineffective to deal your shares at or above the initial offering price . ”
For Redditors who treat retail investing like a form of net trolling , Reddit ’s IPO could be the ultimate meme . The ship’s company also write in its initial offering filing that it will invite Reddit user and moderator to buy strain in its point share broadcast . This is a rarefied move that would let residential district members corrupt line of descent at the same damage as institutional investors upon IPO . player will be give precedence based on their karma , which is a way of measuring residential district contributions on Reddit .
But yet another risk factor for investors is that Reddit “ may not be capable to attain or maintain profitability in the future , ” it writes in the S-1 . Despite its gibbousness in cyberspace culture , Reddit has failed to turn a net income . In 2023 , Reddit obtain a net passing of $ 90.8 million , adding to the ship’s company ’s accumulative deficit of $ 716.6 million .
Reddit files to go public at last
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Redditors are already using r / spot to plow API controversy