Vol. 4, No. 5 — r/IPO
What you need to know about Reddit's IPO; Australian iron ore miners needn't worry about China's housing collapse; Markets look a bit frothy; Value in coffee
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Read time: 40 minutes
In this issue
Quote | Keith Gill, aka Roaring Kitty
Cartoon | Reddit moderators pizza party
Finance | r/IPO
Economics | Steely resolve
Markets | Frothy
Investment idea | Value in coffee
Quote | Keith Gill, aka Roaring Kitty
“I am not a cat.”
Cartoon | Reddit moderators pizza party
Finance | Reddit’s initial public offering
r/IPO
Reddit is going public. Here’s what you need to know before you yolo into the shares
Last week, Reddit, the company behind the forum of the same name, declared they’re finally going public. The 19-year-old social media company filed an initial public offering (IPO) prospectus with the Securities and Exchange Commission (SEC), America’s financial market regulator. Soon, investors and apes alike can trade Reddit’s shares.
But the platform that hosts r/WallStreetBets, a community for adrenaline-seeking stock pickers that boosted GameStop shares during the pandemic, has been hush-hush about the details. They hope to generate a buzz and enjoy their users’ stock-pumping tendencies. But the company hasn’t declared how many shares they’ll sell or at what price. And other details about the firm’s capital structure are murky at best.
Whether you should buy Reddit’s shares when they’re offered will depend on your portfolio and what the offer price is. Reddit has a successful platform with valuable data, and should become quite profitable in the future. But the expected valuation seems a bit frothy—typical of IPOs. As a result, investors should be cautious.