Some 7% of Reddit’s free share float (or more) has been sold short so far, according to an estimate from the analytics company Ortex cited by Reuters. That’s something the social platform was worried would happen, noting in its prospectus that retail traders in its subreddits (and particularly on r/WallStreetBets) could cause “extreme volatility” in Reddit’s share price. Those Redditors had already signaled in posts that they were planning to short the stock.
Public data revealing short interest positions on Reddit won’t be available until April 9.
Reddit shares fell as much as 11% at market open to a low of $51.52 after an already-bad Wednesday. Bloomberg reports that Wednesday’s decline was in part due to a Hedgeye Risk Management report naming Reddit as a short idea, saying the stock could plummet 50%.
Reddit’s share price in the low $50 range is still well above its IPO price of $34, and even above its impressive first-day closing price of $48, which had investors chattering about the company’s impressive gains.
Don’t forget that r/wallstreetbets is literally drooling in anticipation of being able to short Reddit stock. Unfortunately or fortunately, that sub has enough market power to be force to be reckoned with.
It’s a shit company, and lots of profit potential in seeing it go down. So it makes sense.
Owners are going to cash out at these levels now and move on to another business while reddit takes a dive.
Can you imagine if they banned WSB
Dedicated users will organise efforts from elsewhere which could include lemmy
Threaten us with a good time. If they do my stock in Orville Redenbacher will be doing well.
Now that will finally kill reddit. It’s the only fun part of Reddit left.