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Reddit cites r/WallStreetBets as a risk factor in its IPO filing
(techcrunch.com)
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this post was submitted on 24 Feb 2024
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Wall Street doesn't care about profitability, they only care about growth.
They should be worried about how much of their 'growth' is bots.
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.
Nope that was true when interest rates were low.
Now they care about the bottom line.
It can change again.
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.