And shares of another social media platform, Rumble, are tumbling, too

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.

  • athos77@kbin.social
    1482·
    8 months ago

    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.

    I love how they’re blaming redditors instead of spez and his COO selling over a million shares …

    • livus@kbin.socialOP
      63·
      8 months ago

      They’re not only blaming redditors, looks like at least one Hedge fund:

      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%.

      There’s been a lot of talk of it being overvalued so it’s not weird that some want to short it.

      • gravitas_deficiency@sh.itjust.worksEnglish
        191·
        8 months ago

        They will absolutely be sticking to the narrative that this is all WSB’s fault though. It’s a really convenient scapegoat. Remains to be seen if it will actually work though.

        • eggmasterflex@lemmy.world
          8·
          8 months ago

          I don’t think so. I mean, some publications might, but big ones like Bloomberg and Reuters have acknowledged since the IPO that the major investors believe it is well overvalued. IIRC they reported that Fidelity and Blackrock gave it a $5B valuation. I recall another major investor cited the difficulty of feeding paid ads to its user base in the current community based format, and unsuccessful attempts to push profile/user centric “feeds” (similar to Facebook and Twitter) instead.