- cross-posted to:
- reddit@lemmy.world
- reddit@lemmy.ml
- cross-posted to:
- reddit@lemmy.world
- reddit@lemmy.ml
You must log in or register to comment.
IPOs are cash outs these days
Oh. Oh no. How tragic.
Uh.
… Anyways.
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!
My company is planning on IPO ina year or so, I think we’re taxed 50% if we sell early.
I’m pretty sure that’s normal capital gains stuff though?
Yup! And it’s generally still the best advice, drop and diversify.
Wait, what’s “reddit”? Is this something i’d need the internet to know about?
I won’t lie, I do regret not making a quick buck off of it. I could have gotten in at 30-something and out at 40-something easily enough.
I just couldn’t stomach the thought of buying RDDT. I also guessed Pigboy Spez and his pals would leave us suckers holding the bag.
Turns out some brave peasants did make money on the IPO. Just not this peasant.
I suspect the stock will spiral down from here.
Meh. Hindsight and all that.
People said it about Apple, Amazon, and Bitcoin. Can’t know which ones that will happen with and which won’t.
I thought about it, and I refused on a moral ground to support reddit. It still may go up, despite everything.
Rich people don’t usually have morals… That’s the difference between us and them.
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.
My instinct was that there would be irrational exuberance for the stupid stock. And ignored it.
The market is often pure speculation and gambling until the sobriety kicks in.
Anyway, I missed out on this one because of my caution and contempt for reddit. No point crying over it.
I didn’t want to tie my user name to my real life details for that payoff.
Same here! I gave them a fake email and didn’t want to do myself to them. Glad you brought that up.
On the desktop version of reddit you can click through the screen that asks for an email. I never gave reddit my email.
Had to make a new email for lemmy though.
Nothing made me wanting to spend time and effort generating free content more then the IPO.
Make your own damn money.
Anyone who bought that shit deserves to lose all their money.
So the IPO was Thursday; on Monday:
Reddit CEO Steve Huffman sold 500,000 shares … at an average $32.30 price, receiving $16.15 million.
CFO Vollero Andrew sold 71,765 Reddit shares for $2.318 million.
Chief Operating Officer Jennifer Wong sold 514,000 shares for $16.602 million.
Chief Technology Officer Christopher Slowe sold 185,000 shares for $5.975 million.
Chief Accounting Officer Michelle Reynolds sold 3,033 RDDT shares for $97,966.
Board member David Habiger sold 3,000 shares for $102,000.All told, that’s $41.245 million worth of Reddit shares sold.
I knew they were going to sell as soon as they could, but damn. As someone who knows the bare basics of how it all works but does NOT actually follow the stock market, the last time I saw that kind of executive dumping was Enron just before it went under, lol.
Can someone who actually follows the markets tell me whether all the social media/tech IPO C-suites do that these days, or is this genuinely unusual? Because honestly I find the sales a bit shocking in both rapidity and amount, even for as greedy and openly corrupt as the Reddit board has been over the last few years.
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.
I hate these fucking people so much.
At least they are destroying their own place, now lets hope they just become rich nobodys and keep their greedy fingers of everything else.
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.
This is just you saying that you would crush the weak if you had the opportunity so you empathize with those that do.
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.
From my experience, these people have lots more shares and what they sold, aside from spez, is 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:
Great chart. I see your point. Thank you!
Wait, there was no (or a very short) lockup period!!!
Tremendously special rules for tremendously special people.
His 500,000 class a shares were a part of the ipo offering, so they were directly sold with the ipo. He still has 4.1 million class b shares which have greater voting rights than class a shares. So the people in this thread saying he’s sold all of his stock aren’t correct, though he did sell all of his class a shares that are being traded in the public market for the ipo. It’s all in sec filings as part of the ipo. You can see here who sold as part of the ipo and how much, and where all the ipo shares are coming from. Some were created to raise money for the company, others were already existing shares being sold by those who already held shares before the ipo. They wouldn’t be able to sell after the market actually opened, that’s where lockup periods come in, and it’s 180 days in this case. The sale price of these shares was negotiated as part of the ipo before it was trading on the exchange. Now any still held are locked up for that period.
They wouldn’t be able to sell after the market actually opened, that’s where lockup periods come in, and it’s 180 days in this case.
That must be part of the amendments then, because when I looked at the Reddit S-1 about three weeks ago, the lockup for all share classes was at three days, very brief. I looked it up specifically because I wanted to know how soon Spez could get to the dump part of the pump-n-dump, and here we are.
Ooops. It was a month ago, on Feb 24. This is the S-1 I was viewing at the time, though now I see that it was qualified to start with:
Shares purchased through the directed share program will not be subject to the terms of the lock-up agreement or market standoff restrictions.
https://www.sec.gov/Archives/edgar/data/1713445/000162828024006294/reddits-1q423.htm
I’m not an expert, I could be misreading it. The wording isn’t straight forward. This is the section that mentions it:
In connection with this offering, we and all of our directors and executive officers, the selling stockholders, and certain other record holders that together represent approximately 82% of our outstanding Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock are subject to lock-up agreements with the underwriters agreeing that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, in accordance with the terms of such agreements during the period ending on the opening of trading on the earlier of (i) the third trading day immediately following our public release of earnings for the quarter ending June 30, 2024 and (ii) 180 days after the date of this prospectus (such period, the “Lock-up Period”): (1)offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, lend, make any short sale, or otherwise transfer or dispose of, directly or indirectly, any shares of our Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock; (2)enter into any swap, hedging transaction, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our Class A common stock, whether any such transaction described above is to be settled by delivery of our Class A common stock or such other securities, in cash or otherwise; (3)publicly disclose the intention to take any of the actions restricted by clause (1) or (2) above; or (4)make any demand for, or exercise any right with respect to, the registration of any shares of our Class A common stock or any security convertible into or exercisable or exchangeable for our Class A common stock.
Yeah, that’s the section, at least for Class A. I think I’m the one who misread, and took “third trading day immediately following our public release of earnings for the quarter ending June 30, 2024” for “third trading day immediately following our public release blah blah blah” (the IPO).
I need to take more time when I’m sounding out the words, lol. Thank you for looking and taking the time to cite the section.
I’ve read it like ten times and am still a little confused, it is about as confusingly worded as possible I think, haha.
Man I wish I had had the capacity to short the stock so much.
Spez will probably quit within a year or two.
I feel like he is Ellen Pao-ing himself now.
His purpose is to implement all of the unpopular shit, take off with his golden parachute, and then a new CEO steps up promising better mod tools and maybe better performance in the mobile app. They’ll make the users think Reddit is headed in a positive new direction with Huffman gone, even though all of it has been preordained and effectively nothing will change, but at least the users will have their bread and circuses.
Perfectly and accurately stated.
Problem is Pao cracked down on the toxic hate shit that was making Reddit risky to invest in. It was controversial but ultimately a net positive for the community. Huffman is essentially selling seed corn by betraying developers and power users for short term gain (unfettered bot traffic, juicing native app usage, selling out to AI companies). A net loss for community morale and cohesion.
Ellen Pao was also the face of Victoria’s firing (who was actually fired by Alexis Ohanian). Other events outside of Reddit (her failed gender discrimination lawsuit and her husband’s own legal issues) also provided fuel for the then-nascent alt-right movement to position her as a feminist, POC bogeyman.
It is also hilarious reading the things she was vilified for back then. How quickly the “free speech absolutists” revealed their true colors when they tried to make their own platforms like Voat. I remember reading shortly afterwards how the sites became “taken over” by the alt-right as the MAGA crowd got more vocal, but the truth was they were there from the beginning.
Reddit CEO Steve Huffman sold 500,000 shares on Monday at an average $32.30
On Monday the 25th, Reddit shares were trading between ~$49 and ~$59. The stock has not yet dropped below the initial price of $34.
Can somebody explain why these shares may have been sold below market value?
There’s a bunch of trades which happen instantly when you IPO. I don’t know exactly how it works, but I think that when my company went public the pool offered in the IPO included stock from priority shareholders. So I’m guessing he effectively sold them to reddit at slightly below initial offer value for them to release to the public as part of the IPO. This way he doesn’t tank the stock by selling off 500k shares on the stock exchange.
He borrowed money on Reddit’s books. Reddit used that money as part of the IPO. Then he sold his shares, and got his hands on the now clean cash money. Reddit is left with the debt? Is this about right?
You’re exactly right, he sold off all his class a shares as part of the ipo, though he still retains 4.1 million class b shares that have greater voting rights. You can see who sold shares as part of the ipo with the sec filings:
In the table there in the middle you can see how many class a shares were sold as part of the ipo and where they all came from, 500,000 were from huffman. So all the people in the table there sold at the ipo price (or they were new shares created by the company to raise money), they were not sold at the price it was later trading at in the open market. They were already bought by then as part of the ipo. He wouldn’t have been able to do that anyways, I see a lockup period of 180 days listed.
Yeah totally didnt see that coming /s
Removed by mod
Gee it is almost like completely alienating your user base is a bad for profits?
