Reddit Shares Dip in 2nd Trading Day
Reddit shares dipped in their second day of trading Friday, giving up a small part of the big gains recorded in the freewheeling social media platform’s debut the day before.
At midday, the social media platform’s stock gave up $1.10, or 2.1%, to $49.33. The broader markets were also down a fraction, with the S&P 500, the Nasdaq and the Dow Jones Industrial Average all slipping by less than 1%.
Reddit’s decline came after the stock, trading under the ticker symbol RDDT, shot up 48% in its first day on the New York Stock Exchange to close at $50.44, after peaking during the session at $57.80.
The initial public offering price was $34, and some investors who bought in at that price likely sold when the stock made its initial run to cash out on those gains. Those sales in turn would have sent the stock back down a bit.
Reddit set aside up to 1.76 million of 15.3 million shares being offered in the IPO for some of the most active of its roughly 76 million users. Typically, IPOs are bought out by mutual funds, hedge funds and other institutional investors who were able to purchase the remaining shares.
The company also has several high-profile investors, notably including OpenAI CEO Sam Altman. An early investor and one of the company’s biggest shareholders, Altman owns 12.2 million shares of Reddit stock, The Associated Press reported, citing to the company’s IPO disclosures.
Reddit’s chief executive Steve Huffman is paid more than the heads of Meta, Pinterest, and Snap combined, according to Quartz, raking in a whopping $193 million in 2023.
It was the largest stock offering from a social media company since Pinterest debuted in 2019. Its success gives a boost to the IPO market, which started the year in the doldrums. The Wall Street Journal reported that the solid gains could encourage other companies to take the plunge and go public.
The run-up pushed the value of the San Francisco-based Reddit to about $9.5 billion, Semafor reported. It was valued at about $10 billion after its last private fund raising round in 2021.
Reddit’s debut came one day before shareholders of Digital World Acquisition Corp. approved its planned merger with Truth Social parent Trump Media and Technology Group. Digital World shares dropped as much as 7.5% after the results of the vote were announced, but then bounced in choppy trading. The stock was down $1.11, or 2.6 %vat $41.70.
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