In its IPO documents, Reddit said the price and volume of its stock could “experience extreme volatility for reasons unrelated to our underlying business.”

Reddit Warns That r/WallStreetBets Could Wreak Havoc on Its Stock Price::In its IPO documents, Reddit said the price and volume of its stock could “experience extreme volatility for reasons unrelated to our underlying business.”

    • Buddahriffic@lemmy.worldEnglish
      28·
      10 months ago

      I’d stay away from it entirely. If the total valuation is only a few billion, there’s people and organizations that can easily keep the price artificially inflated if they want to kill off some short sellers. And no one will step in to change the rules to save them in this case.

      I think the price will go down in the long term, but it’s completely unpredictable in the short term. Especially if WSB vocally tries to take one position. I bet there’s some big money that still wants to hurt them after the whole GME thing, even though I think most of WSB that tried to get into that also lost money.

      If you must get your feet wet, my guess would be that the opposite of what the sentiment of WSB is will make money if you time it right and get out before they realize their losses or their options expire.

    • spongebue@lemmy.worldEnglish
      9·
      10 months ago

      One thing I saw after the GameStop thing happened that gave me a bit of perspective: when you buy and sell stock, your risk in the worst case scenario is that a company goes down to zero and you lose everything you put into it. That “everything you put into it” is the limit of your losses. When shorting, there is no practical limit to your losses because there is no upper practical limit to the share value.

      Don’t get me wrong, I’m in the fuck Spez camp as well (hence me being here). But there is virtually unlimited potential risk to being wrong about this, so keep that in mind.