In “King Richard,” the 2021 TV series depicting the Williams sisters’ budding tennis careers, Will Smith’s character Richard Williams turned down so many big opportunities for his daughter Venus that it made him lose his life. you have to gape. It turned out pretty well for her and her sister, Serena, in the end.
If only social media platform Reddit — co-founded by Alexis Ohanian, the current husband of Serena Williams — had that kind of nerve and timing. Redditors took the market by storm last year, fueling a retail craze for meme stocks like GameStop, which turned investing in their fundamentals, quickly making the WallStreetBets forum the hub. of the financial universe. Founded in 2005 in a dorm room, much like Facebook a year earlier, Reddit is today one of the most visited websites in the world with over 50 million daily active users. to January.
But, financially at least, that’s where the similarities end. In an age of tech buzz, Reddit is a rare case of poor outreach and founders who don’t know when to keep them and when to fold them.
The company was sold in 2006 to media company Condé Nast for just $10 million. As of last August, it was privately valued at $10 billion. At the end of 2020, Mr Ohanian tweeted that, at the time of the sale, he thought he was ‘giving away something’ after 16 months of work and more than his parents had made in their lifetime. their. He wrote that, back then, there were a lot of things he “needed” to learn like management, team building, and leadership. A better sense of time will also help.
Co-founder Steve Huffman, who now serves as chief executive officer, has perhaps cut back on the management part, and it seems he has learned to strike while the financial iron is hot. Reddit doubled its value in a private transaction just days after the euphoric GameStop also rolled out its first Super Bowl ad. But the fundraising plan has been in the works since before the episode.
Less well, Reddit waited to file its secret filing to go public until late last year, just when tech stock valuations started to change. An offering expected in the first quarter led by Goldman Sachs and Morgan Stanley never happened. Since then, sentiment has plummeted towards the ad-based social media business.
The tech-heavy Nasdaq composite is down 23% this year. Last week, Bloomberg reported that Fidelity Investments slashed Reddit’s valuation in April, marking its shares down by more than a third month-over-month. And since then, Snap Inc., the parent company of the ad-based social media platform Snapchat, has lowered its guidance, citing the unfavorable macroeconomic environment that has deteriorated “rapidly” faster and faster” than predicted. That statement sent Snap’s stock down 43% in a single day, dragging the entire social media sector down with it.
When Reddit’s WallStreetBets became a place that critics say has helped keep fools out of their money, including having a “diamond hand” – held in a speculative frenzy – that that made Mr. Huffman an audience member of Congress. He testifies that the investment advice on the forum is “probably one of the best” because it has to be accepted by the crowd. Next time, maybe he should accept whatever WallStreetBanks tells him.
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https://www.wsj.com/articles/reddit-is-the-king-of-bad-timing-11654437602?mod=rss_markets_main Reddit Is the King of Bad Timing