this post was submitted on 24 Feb 2024
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Reddit cites r/WallStreetBets as a risk factor in its IPO filing::As Reddit finally files to go public, the company wrote in its S-1 filing that "meme stock" schemes on r/WallStreetBets could pose a risk to investors.

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[–] [email protected] 31 points 8 months ago (3 children)

Wall Street doesn't care about profitability, they only care about growth.

They should be worried about how much of their 'growth' is bots.

[–] [email protected] 21 points 8 months ago

They care now that interest rates have increased. That’s kinda what the whole “enshitification” and layoffs are all about. Tech companies desperately scrambling to make a profit.

[–] [email protected] 18 points 8 months ago

Profitability is beginning to matter more. 5.25% Federal Funds rate, and a Prime-Rate of like 8.5%, means that it costs 8.5% for businesses to borrow money now.

So that means that if a business borrows at 8.5%, they must grow by 8.5% to just stay even with interest rates and the cost of borrowing money. Because a lot of these "growth" strategies involve losing money for years-and-years, you have to factor in the costs of those losses as well.


When Federal Funds Rate was 0.25%, no one cared about the cost of money or the cost of loans. Today, Wall Street cares, and you can see it in all the stock movements. The less-profitable companies have been getting hammered.

[–] [email protected] 6 points 8 months ago

Nope that was true when interest rates were low.

Now they care about the bottom line.

It can change again.