Comment on Reddit seeks to launch IPO in March

FrostKing@lemmy.world ⁨9⁩ ⁨months⁩ ago

• Anyolduser@lemmynsfw.com ⁨9⁩ ⁨months⁩ ago

  An IPO is an initial public offering. It is when shares of the company are being sold for the first time. This allows a company to (potentially) raise an enormous amount of money to expand their business.

  When people buy and sell stocks or you see stock prices being reported on this is more or less a secondary market, people or investment firms trading stocks amongst themselves. The company doesn’t get any money when a stock trades hands in this fashion.

  An IPO is different. The company is selling little pieces of ownership and the money from those sales go into their coffers. To raise the most funds the company wants to convince potential buyers that the company is valuable and is now or will soon be profitable (and will pay a dividend out for each share owned). This assessment of value (called valuation) is often complex and can take a long, long time.

  Reddit’s recent effective shutdown of third party apps to force mobile users onto the Reddit mobile app was almost certainly an effort to get a better valuation. It shows potential buyers of shares that the content on Reddit can only be accessed on mobile devices via an app that the company would get the ad revenue from.

  All the kerfuffle and shakeups at Reddit have been leading up to the big day, the IPO. The big news scoop is that that date has been set for March.

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  • whatwhatwutyut@midwest.social ⁨9⁩ ⁨months⁩ ago

    This is super informative without being condescending, wonderful job

    I hope you have a great day!

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    • Anyolduser@lemmynsfw.com ⁨9⁩ ⁨months⁩ ago

      Thank you and I hope you have the same.

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  • phoenixz@lemmy.ca ⁨9⁩ ⁨months⁩ ago

    It also is used as a cash cow by many startups where the IPO will get them nice bonuses, large amounts of valuable stock that they can then sell.

    This is honestly what I expect from asshole apex as well

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• tmijail@lemmy.world ⁨9⁩ ⁨months⁩ ago

  They’re going to start selling shares of the company on public markets

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