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Reddit cites r/WallStreetBets as a risk factor in its IPO filing (techcrunch.com)

submitted 9 months ago by L4s@lemmy.world to c/technology@lemmy.world

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Reddit cites r/WallStreetBets as a risk factor in its IPO filing::As Reddit finally files to go public, the company wrote in its S-1 filing that "meme stock" schemes on r/WallStreetBets could pose a risk to investors.

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[–] KingPyrox@lemmy.ca 24 points 9 months ago* (last edited 9 months ago) (2 children)

That's not exactly correct. The CEO & CFO are paid a salary way less, like I think around the $300k range. The $285M is in stock options, which only has a value based on the price of the stock. They could hand them back to the company but they would be of no value to the company until the IPO.

[–] Th3D3k0y@lemmy.world 8 points 9 months ago (2 children)

I'm confused how they could be paid in stock options when they aren't traded. Do they just use made up numbers until this point and get "paid" in exposurebucks?

[–] KingPyrox@lemmy.ca 13 points 9 months ago

Even if a stock isn't publicly traded it still has value. It's just that retail investors can't buy or sell it. Basically, it's owning a part of the company. So they now technically own whatever percentage (number of shares/total number shares available). Unfortunately, it doesn't equate to a monetary value to the company itself just show's the company who owns what percentage of it.

So well the company is "valued" at what it is now, they are only saying that if they were to sell all those shares in the open market that would be what it's worth. Now in the business world the CEO & CFO will be able to go get loans based on that value (putting that stock as colaterial) but it's basically all that they'd be able to get right now.

[–] JackbyDev@programming.dev 3 points 9 months ago

Basically, yes. It's like paper money the company can print more of and dilute the value of.

[–] GluWu@lemm.ee 3 points 9 months ago (1 children)

Plus $800k in performance based bonuses.

[–] KingPyrox@lemmy.ca 4 points 9 months ago

Right, but that's nowhere near the money to be able to make the company break even.