• BlackPenguins@lemmy.world
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      8 months ago

      ELI5 How would a pump and dump work here. If you buy stock to pump it up then everyone dumps. Isn’t it just back to where it started in value?

      • ramble81@lemm.ee
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        8 months ago

        For that to happen the pre-IPO price would have to be lower than the perceived peak which is a gamble here. The goal would be to buy as much as possible and sell it as soon as it goes up to make a profit off of it, and be rid of it before you’re left when it crashes. The problem I see is that window is hopefully gonna be very short and you’re not gonna be able to time it. So it’s a serious risk.

        • Lionheart_xa@lemmy.world
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          8 months ago

          Well you can do this risk free if you understand the bare minimum of how to use a stock trading account.

          Once you have your shares you immediately put a limit sell trailing percent or dollars order on the security. What this does is automatically sells the stock the very second it drops by the amount you set.

          So with reddit you set it to sell at something like 2% and then the second it drops below that you cash out with your money.