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With Reddit becoming public, why are the founders creating so much drama around the site? Wouldn't that make their IPO worse? (kbin.social)

submitted 1 year ago* (last edited 1 year ago) by --@kbin.social to c/NoStupidQuestions@kbin.social

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I'm not into investing, so sorry if this doesn't make sense.

With all the drama and news surrounding Reddit recently, why is Reddit making such bad decisions when they are about to go public? With all of their negative decisions they've been making recently, wouldn't all the bad press make their IPO worse? Are they trying to maximaze their profits to make their company seem better to investors when they go public?

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[–] Curtains 3 points 1 year ago* (last edited 1 year ago) (1 children)

Tl;Dr: the stock will still likely hold for a couple weeks as investors and the market adjusts to the stupidity spez is. Once this happens spez will be removed/step down as he is gonna make moreoney than he can jerk off to.

Stocks and the market is wierd, but let's take the DoorDash IPO as an example. Before they went public, they get an estimate of the opening price. It was sitting at a little over $250 per share pre-ipo. Post-ipo, the stock plummets and continued to fall until it's where it's at today($70).

It did IPO at 160ish(still $100 less than expected. Then it jumped up to like $230 eventually all for it to drop again.

Why is this important? They were not and are still not profitable as a business. They have a TON of cash flow, but no profitablity. Uber has the same issue.

Reddit, although not profitable, may stillake a splash early IPO, but once the market realizes they have lost a significant user base and ad revenue to boot, it will inevitably fall.

Bad part is the little fucker spez is gonna make out like a bandit and then pass the CEO title to some poor fool that thinks they can fix it. So far the only time that has worked is like Chewy and GameStop.

[–] furrowsofar 2 points 1 year ago (1 children)

Buying IPOs are generally pretty risky. It is not uncommon for the IPO price to be unrealistically high then a year later for the price to be much lower. It will be interesting to see what happens with Reddit. Not sure why the big deal of "getting in" on an IPO. How often does buying at IPO actually work out?

[–] Curtains 1 points 1 year ago

Absolutely risky, but most of the initial holdings are from employees. And they all usually sell a large share of their assets when they are cleared and able to do so. That also helps tank the IPO price.

Generally IPOs are risky. Always good to wait like at least a month or 2. Usually a year to let level.