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> I don’t know! Capitalism is different now! It used to be that, if you were a struggling online lingerie retailer, you could try to sell more lingerie, or you
by a-dub 5y ago
> I don’t know! Capitalism is different now! It used to be that, if you were a struggling online lingerie retailer, you could try to sell more lingerie, or you could try to cut your costs of selling lingerie, or you could expand into some related apparel business lines, or you could shut down, I don't know, I’m sure there were more options, but if you went to an investment conference and said “I’m tired of lingerie let’s do electric cars” investors would be skeptical. But now sometimes you can be a struggling online lingerie retailer and get hit by Reddit lightning. And if that happens, you gotta seize the moment. “People are paying attention to us, we can raise money, only one choice here: electric cars.” (Honestly two choices: electric cars or crypto.) And off you go. Now you run an electric-car company. Congratulations.
i mean other than the hivemind of reddit making choices on who gets to play based on lulz, how is this all that different from private equity (chosen CFOs without a cause with private investor funds) or SPACs (chosen CFOs without a cause with public market funds)?
- Animats 5y agoThis isn't new. Back in the first dot-com boom, someone did an IPO for a strip club on Broadway in San Francisco, as "BOYSTOYS.COM INC", ticker symbol GRLZ. That failed. (The details are all in the SEC filings.) So they pivoted to trading in pollution credits. That failed. So they pivoted to selling some antifreeze product. That failed in 2020, and all the independent directors quit. They seem to be semi-defunct, not dissolved but not making SEC filings on time. GlyEco, Inc. CIK#: 0000931799 formerly: ALTERNATIVE ENTERTAINMENT INC (filings through 1997-03-12) formerly: BOYSTOYS COM INC (filings through 2009-08-13) formerly: Environmental Credits Ltd (filings through 2011-11-10)
- vmception 5y agoIts not new. In dot com bubble mattress companies pivoted to ISPs. Back then though, the announcement is what caused the speculative fury and let them raise more capital by selling into liquidity. What is new is that simply being on the most shorted stock list makes reddit try to blow up some hedge funds by pumping the shares a few hundred percent - forcing additional buys by the hedge fund - alltogether creating enough liquidity to actually rescue the company if they sale new shares directly into the market! Sometimes the companies are asleep at the wheel and miss it. It took Gamestop months to wake up. I told people they could do this, many doubted.
- deleted 5y ago[deleted]