There are no guarantees an IPO will pop, even a buzzy one. Uber debuted at the low end of their estimate and trended downward, for ex, and didn’t recover for over a year.
He sold about 500,000 shares. He owned, apparently, 3.3% of the 17.06 million total shares of the company, meaning he had a little over 562,000 shares. He sold almost all of his shares. That doesn’t exactly exude confidence in future growth, IMO.
It doesn’t, he had like 4.6 million shares before the ipo. The 500,000 number sold is just his class A shares. He’ll still have 4.1 million shares of class b stock after this it looks like. The class b stock has ten votes compared to one vote for class a stock for any shareholder votes I believe. So selling only his class a shares won’t change the percent voting control of the company he has by much. The person you’re replying to is confused about how many total shares he has. I don’t think the class b shares are being openly traded though, I think the ipo is just offering class a shares, which is what’s causing the confusion here. He sold almost all of his class a shares, but still has plenty of class b.
Yeah, I mean ipo’s in general are definitely a rich get richer kind of thing that screw over retail traders, but I don’t think there’s anything particularly unusual about this one.
The site’s audience grew rapidly in its first few months, and by August 2005, Huffman noticed their habitual user-base had grown so large that he no longer needed to fill the front page with content himself.[11][14][15] Huffman and Ohanian sold Reddit to Condé Nast on October 31, 2006, for a reported $10 million to $20 million.[3][16] Huffman remained with Reddit until 2009, when he left his role as acting CEO.[17]
Huffman spent several months backpacking in Costa Rica[18] before co-creating the travel website Hipmunk with Adam Goldstein, an author and software developer, in 2010. Funded by Y Combinator,[19][20] Hipmunk launched in August 2010[21] with Huffman serving as CTO.[22] In 2011, Inc. named Huffman to its 30 under 30 list.[22]
In 2014, Huffman said that his decision to sell Reddit had been a mistake, and that the site’s growth had exceeded his expectations.[23] On July 10, 2015, Reddit hired Huffman as CEO following the resignation of Ellen Pao[24] and during a particularly difficult time for the company.[25] Upon rejoining the company, Huffman’s top goals included launching Reddit’s iOS and Android apps, fixing Reddit’s mobile website, and creating A/B testing infrastructure.[3]
Since returning to Reddit, Huffman instituted a number of technological changes including an updated mobile site and stronger infrastructure, as well as new content guidelines.
I don’t think that he’s had a whole lot of faith in Reddit as a business since early-on.
They acquired Alien Blue, but what they put out under “Reddit” was not Alien Blue in the least bit. They basically bought it to kill it. I had Alien Blue. :(
My favorite way to visualize the meaning of “asshat”: the person is such a sad waste of human life that their entire upper body is effectively just a hat for their posterior.
Well, you wouldn’t expect it to in the growth phase.
A lot of consumer-facing Internet companies have a large portion of their costs be fixed costs. That is, a programmer or QA guy costs the same amount whether you have ten users or ten million users. But your revenue is linear in your userbase size. So you really don’t want to be a small company, if you fit that profile.
The idea is to burn money and grow rapidly to the point where your fixed costs are relatively small. It makes no sense to try to generate profit if you lose growth for it.
That’s especially true for social media companies, because for them, network effect is a major factor – the value of the network is something like the square of the number of users.
So you really want to be big, not small.
So the solution is to grow quickly, lose money during that period, then adjust and monetize the userbase when you can’t afford to burn money growing any more.
That transition to a profitable state after a money-losing growth state usually means that a company is gonna do something unpopular (since they’re optimizing for something other than appeal) and what Corey Doctorow was complaining about as “enshittification”.
The fact that Reddit lost money during the growth phase doesn’t mean that it was a failure – that would have been intended, part of the business model.
Now, if it’s losing money once the growth phase is done, that could be another story.
According to the second link, he sold nearly all of his class A shares, but none of his class B shares. His total share of the company went from 3.2% to 2.6%, which, is still not insignificant.
19% is still a lot higher than the “only 40mil out of a 16 bil stock” that I’ve seen mentioned and upvoted elsewhere in the thread. But yeah, not that big of a deal, I imagine. I was expecting him to sell over 30%
They dumped $50 million the same week as the IPO? Talk about confidence in your company!
Also, they didn’t have any lockout period? That’s also bullshit. I worked for a company during an IPO some years back and nobody could sell their shares for something like a year!
I think that would be shorting the stock, which is financially betting against their stock. It’s worth mentioning that shorting a stock has potentially infinite risk.
I don’t. Such as the nature of living in the conservative fascist multiverse.
You cant expect everyone to stop wanting to crush the weak just because you were born in a era of unprecedented technological advancement. Feudalism is still alive and well in some parts of the world, and it has been going strong throughout human history. For all we know, it will outlast democracy.
We are cavemen and cavewomen with space ships and computer phones. Stop having such high expectations for us dumbasses.
When I was poor and complained about inequality they said I was bitter; now that I’m rich and I complain about inequality they say I’m a hypocrite. I’m beginning to think they just don’t want to talk about inequality.
Some of these people have been with Reddit since the very beginning and this is basically their first practical chance to sell any of their shares - I wouldn’t read too much into their activity this week. For a company valued at $9B, having the founder & other executives only sell $41M in the week of the IPO if anything feels like the opposite of dumping.
From my experience, these people have lots more shares than what they sold. And aside from spez, it’s not really that much.
If I am not mistaken, these sales are also planned and public knowledge before the sales are executed. The key shareholders should know executives are going to dump stock.
But yes. This seems normal to me.
One thing of note is the average price spez sold for. That is actually below market value so it’s likely that his sale price was fixed, which I believe is a thing.
Yes. Insiders with that high a fraction of ownership exercise the ability to sell shares at a predetermined percentage value of a full priced share. Usually pegged to the closing price at the beginning or end of a quarter, whichever is lower.
I was thinking short sellers looking to profit would buy up as much as they could to make a bubble then short sell once the market started going sideways, and this chart seems to accurately reflect that:
I bought put options on Monday. So far the stock is doing exactly what I thought it would do. I expect to see it at 25 a share before they expire in a few months.
I’ve got a single $35 p for 4/19. Didn’t wanna go too nuts, I’ve seen plenty of shitcos reach ridiculous valuations after IPO like DASH, and then lose my ass buying puts waiting for the drop everyone knew was coming.
I was pretty confident this was going to follow the same path like what robinhood did when it went public and I threw a bit of heavier money at my confidence on it. Mine are $40 put options that expire mid July. Should be enough time to bottom out on the stock price before it starts to rebound and settle at closer to where it should be. Hoping to triple up on profits. Reddit owes me for the massive amount of ai data from comments I gave them. Lol
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