When thousands of subreddits went dark in protest, it exposed the tension at the core of Reddit. Is the web’s most reliably human forum a gold mine for investors, or an old-fashioned dumpster fire?
The wild card here is that these stock purchasers, who will pay the IPO price for their shares, won’t be bound by “lock-up agreements” that require company officers and employees to hold their shares for a fixed period of time – potentially as long as six months. That means Redditors and moderators will be able to sell their shares immediately if they wish.
While it’s not clear from the perspective just how many of those 1.76 million shares will end up in the hands of Reddit users, the number is likely large enough for those users to exert meaningful pressure on Reddit’s share price. The main concern is that a surge of demand for shares that aren’t locked up could create a sudden run-up in the share price, followed by an equally sharp decline once the initial excitement wears off and short-sellers – investors who effectively place bets that a stock will decline – begin to gather.
From the AP, March 12 – here’s the interesting part:
Its going to be a bloodbath.
Long dated puts will be sooooo expensive