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Retail investors yoloing into AI at peak bubble vibes sounds about right

by Havoc 11mo ago

bombcar 11mo ago
This is the real note - if the company was truly valuable, they wouldn't IPO, they'd get slurped up by someone big. Modern IPOs are mainly dumping on retail and index investors.
- antiloper 11mo ago
  Index investors aren't exposed to IPOs, since the common indexes (SPX etc) don't include IPOs (and if you invest in a YOLO index that does, that's on you). Also: > The US led a sharp rebound, driven by a surge in IPO filings and strong post-listing returns following the Federal Reserve’s rate cut. https://www.ey.com/en_us/insights/ipo/trends https://www.ey.com/en_us/insights/ipo/trends
  - outside1234 11mo ago
    VTI and VT, two of the largest index funds, DO invest in unprofitable companies. And for the rest (SP 500 etc), these companies are going to fake profits using some sort of financial engineering to be included.
- DarmokJalad1701 11mo ago
  What index fund is buying into IPOs ? The S&P 420?
- andrew_lettuce 11mo ago
  This isn't really true. IPOs provide access to much more money in a very short time frame. They also allow parties involved to make huge coin before, during and immediately after the process.
torginus 11mo ago
Just how much of the market do retail investors control? I thought they were a drop in the bucket. Also, is there a way to know how much of the total volume of shares is being traded now? If I kept hyping my company (successfully), and drove the share price from $10 to $1000, thanks to retail hype, I could 100x the value of my company lets say from $100m to $10B, while the amount of money actually changing hands would be miniscule in comparison.
- theptip 11mo ago
  Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. You can easily look up the numbers you are asking for, the TLDR is that the volume in most stocks is high enough that you can’t manipulate it much. If it’s even 2x overpriced then there’s 100m on the table for whoever spots this and shorts, ie enough money that plenty of smart people will be spending effort on modeling and valuation studies.
  - tonyedgecombe 11mo ago
    >Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. This isn't going to end well is it.
  - hvb2 11mo ago
    > Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. But that isn't relevant? If they trade a lot but own less than 10% of the shares they're still a small piece. The institutional investors are likely not trading much, things like 401k are all long term investments
- andrew_lettuce 11mo ago
  When you add in money managed on behalf of retail investors it gets big fast, thinking indexed funds, pensions etc. they are not immune, and ETFs by definition need to participate
  - 11mo ago
levocardia 11mo ago
Indeed, I personally can't wait to gamble away my life savings on this IPO (not /s at all)

Retail investors yoloing into AI at peak bubble vibes sounds about right

by Havoc 11mo ago

Retail investors yoloing into AI at peak bubble vibes sounds about right

This is the real note - if the company was truly valuable, they wouldn't IPO, they'd get slurped up by someone big. Modern IPOs are mainly dumping on retail and index investors.

antiloper 11mo ago
Index investors aren't exposed to IPOs, since the common indexes (SPX etc) don't include IPOs (and if you invest in a YOLO index that does, that's on you). Also: > The US led a sharp rebound, driven by a surge in IPO filings and strong post-listing returns following the Federal Reserve’s rate cut. https://www.ey.com/en_us/insights/ipo/trends https://www.ey.com/en_us/insights/ipo/trends
- outside1234 11mo ago
  VTI and VT, two of the largest index funds, DO invest in unprofitable companies. And for the rest (SP 500 etc), these companies are going to fake profits using some sort of financial engineering to be included.
DarmokJalad1701 11mo ago
What index fund is buying into IPOs ? The S&P 420?
andrew_lettuce 11mo ago
This isn't really true. IPOs provide access to much more money in a very short time frame. They also allow parties involved to make huge coin before, during and immediately after the process.

torginus 11mo ago

Just how much of the market do retail investors control? I thought they were a drop in the bucket. Also, is there a way to know how much of the total volume of shares is being traded now? If I kept hyping my company (successfully), and drove the share price from $10 to $1000, thanks to retail hype, I could 100x the value of my company lets say from $100m to $10B, while the amount of money actually changing hands would be miniscule in comparison.

theptip 11mo ago
Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. You can easily look up the numbers you are asking for, the TLDR is that the volume in most stocks is high enough that you can’t manipulate it much. If it’s even 2x overpriced then there’s 100m on the table for whoever spots this and shorts, ie enough money that plenty of smart people will be spending effort on modeling and valuation studies.
- tonyedgecombe 11mo ago
  >Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. This isn't going to end well is it.
- hvb2 11mo ago
  > Retail is a big deal these days. Used to be sub 10%, now it’s in the 30-40% of daily volume range IIUC. But that isn't relevant? If they trade a lot but own less than 10% of the shares they're still a small piece. The institutional investors are likely not trading much, things like 401k are all long term investments
andrew_lettuce 11mo ago
When you add in money managed on behalf of retail investors it gets big fast, thinking indexed funds, pensions etc. they are not immune, and ETFs by definition need to participate
- 11mo ago

levocardia 11mo ago

Indeed, I personally can't wait to gamble away my life savings on this IPO (not /s at all)