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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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[–] doctorcrimson@lemmy.world 12 points 9 months ago* (last edited 9 months ago)

A Short Sale position is actually a risk and if people know you're doing it they will ride you to the bank by buying up as many shares as they can and force you to pay them when your deadline to repay the borrowed shares comes up.

WSB might be the butt of a lot of jokes but they have (in the past at least) analysts and insights that rival top investment firms, not reflecting of the average participants performance. A much more logical decision would be to inflate the price at launch and then when it reaches a critical state ride it (short sell) into the ground as it panic sells into penny stocks.