Reddit shares plunge almost 25% in two days, finish the week below first day close
Reddit shares plunge almost 25% in two days, finish the week below first day close
Reddit shares are plummeting from the rally highs experienced after the social messaging company's IPO last week.
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Stock Market Capitalism is just imaginary numbers made up by rich people to convince other rich people to give them money. It's completely ephemeral.
The fact that it can rise or fall with nothing more than a silly antic from one person is proof about how insubstantial and frankly ridiculous the whole scheme is.
Well I mean money has been arbitrary since it was invented. Why is one shiny metal more desirable than another shiny metal? Because it's yellow. Rarity didn't even always factor into it; centuries ago the Spanish tearing up South America looking for gold dumped enormous amounts of platinum into the ocean because nobody "knew" it was valuable. Because it was the wrong color but not actual silver.
Fun fact: the capstone on the Washington Monument is a nine-inch tall piece of aluminum. It was expensive because it was difficult to refine until the Bayer process was developed two years after it was set.
Stock price is really just a present value of future expected earnings. Buying Coke for $100 is because you think the earnings of that share in the future is worth $100. So yes, if the company makes an announcement that it isn't as profitable, the price will go down, because buyers won't want to pay the same for an asset that is returns less than it was expedited to.
Yes, there are complications. Shorts, futures, non dividend yielding shares, and more make it more muddied. At the end of it though, the future expected earnings are what is being bought and sold.