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Reddit IPO

AJUMP23

AJUMP23

Parody of actual AJUMP23
Got accepted and invited to make an E*trade account to buy shares. Looks like they think between 31-34 a share.


Probably should just get puts.
 
Maiden Voyage

Maiden Voyage

Gold™ Member
$34 per share


Reddit prices IPO at top of indicated range to raise $748 million​

March 20 (Reuters) - Social media platform Reddit (RDDT.N) priced its initial public offering at the top of its targeted range of $31 to $34 per share on Wednesday, raising $748 million and giving the ailing technology IPO market a much-needed boost.
Reddit and its existing shareholders sold 22 million shares at $34 a share, giving Reddit a valuation of about $6.4 billion.

To tap retail investors, Reddit reserved 8% of the total shares on offer for eligible users and moderators on its platform, certain board members and friends and family members of its employees and directors.

Excluding the shares sold by existing shareholders, Reddit raised gross proceeds of $519.4 million from its IPO. Reuters reported earlier on Thursday that Reddit and its bankers were guiding they could price the IPO at the top of the indicated range or above.
The top-end pricing is a vindication of the company's decision to lower its valuation expectations, after it was valued at $10 billion in a private fundraising round in 2021.

The successful offerings of Reddit and Astera Labs (ALAB.O) could boost the lackluster tech IPO market after two years of largely subdued activity. Earlier this year, the stock market launches of other big names including KKR-backed BrightSpring and sportswear brand Amer Sports received a lukewarm reception from investors.

LOYAL USER BASE​

Despite the loyalty of many of its users, Reddit has lost money every year since its launch in 2005 and has lagged the commercial success of contemporaries such as Meta Platforms' (META.O) Facebook and Twitter, now known as X.
The focus of many Reddit users on niche subjects and the platform's somewhat loose approach to content moderation has been a sticking point with some advertisers.

As it looks for new revenue sources, Reddit in February unveiled a $66 million contract to provide artificial intelligence training data to Alphabet's Google (GOOGL.O).
Reddit, however, said last week the U.S. Federal Trade Commission was conducting an inquiry focused on the company's sale, licensing, and sharing of user-generated content with third parties to train AI models.
Reddit relies on volunteers from its user base to moderate the content posted on its forums.

Moderators can decide to withdraw from their duty at any time, as in 2023, when several quit in protest over Reddit's decision to charge third-party app developers for access to its data.

Reddit's 100,000 online forums, dubbed "subreddits," allow conversations on topics ranging from "the sublime to the ridiculous, the trivial to the existential, the comic to the serious," according to co-founder and chief executive Steve Huffman.

The company's influential communities are best known for the "meme-stock" saga of 2021 when several retail investors collaborated on Reddit's "wallstreetbets" forum to buy shares of highly shorted companies such as video game retailer GameStop (GME.N).
Reddit had an average of 73.1 million daily active "uniques" - users who use its platform at least once a day - in the three months ended Dec. 31, 2023, according to a regulatory filing.

Reddit's shares are expected to start trading on the New York Stock Exchange on Thursday under the ticker 'RDDT'.

Morgan Stanley, Goldman Sachs, JPMorgan Chase, and Bank of America are the lead underwriters for Reddit's offering. Morgan Stanley also won the lead role on Astera's IPO.
Click to expand...
 
AJUMP23

AJUMP23

Parody of actual AJUMP23
I decided not to buy. But the profit is whatever the shares sell for compared to your purchase. Buy at 30 sell at 60 that is 100%.
 
Last edited:
AJUMP23

AJUMP23

Parody of actual AJUMP23
Unknown Soldier said:
A lockup period is a period of time from the date of IPO to some pre-determined date where you aren't allowed the sell the shares you bought at the IPO price

There is typically such a period for IPO investors so I was wondering what that period was
Click to expand...

I don’t know. I didn’t see it in my material.
 
Maiden Voyage

Maiden Voyage

Gold™ Member
Unknown Soldier said:
A lockup period is a period of time from the date of IPO to some pre-determined date where you aren't allowed the sell the shares you bought at the IPO price

There is typically such a period for IPO investors so I was wondering what that period was
Click to expand...
They're allowed to sell immediately:

fortune.com

Inside the growing trend championed by Reddit of companies offering risky IPO shares to their users

Reddit offered IPO shares to its top users, but whether they will actually buy in is unclear.
fortune.com fortune.com
One danger comes from Reddit’s decision to let Redditors who participate in the directed share program sell their shares immediately after the IPO, experts say. Many early investors in a company, including its own executives, are barred from selling their shares for a certain period of time—typically between 30 and 60 days—after an IPO. The practice is intended to protect people who buy shares in the IPO or just after by preventing a sudden deluge of stock sales that could depress the share price.

“Shares being immediately resold to the market increases volatility in Reddit’s stock,” said Taylor Wirth, corporate securities lawyer and partner at Barnes & Thornburg. If there’s a spike in the stock, for example, a large group of Redditors may want to sell their shares to earn a profit rather than holding for the potential of long-term gains. A large sell-off could then make the price fall.
Click to expand...

Full article is worth reading IMO.
 
Maiden Voyage

Maiden Voyage

Gold™ Member
AJUMP23 said:
This alone is reason to short.
Click to expand...
Yeah, I think short term it won't be a good investment but I can absolutely see the stock value increasing once they begin to bombard the site with ads and official paid astroturfing. Unfortunately the user experience will degrade, but if Meta owned products show us anything, people will put up with whatever as long as their account stays free.

How Reddit attempts to monetize and how the user base responds will be interesting to watch from afar.
 
SJRB

SJRB

Gold Member

jI6aQep.png
 
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Maiden Voyage

Maiden Voyage

Gold™ Member

Reddit shares plunge almost 25% in two days, finish the week below first day close​


My favorite bits:
Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Hoffman sold 500,000 shares, and Reddit COO Jennifer Wong also disclosed that she sold 514,000 shares.
Click to expand...
“If the prospects are so bright, why are insiders selling?” Silverman added.
Click to expand...

More context:
Reddit shares began their downward spiral on Wednesday, when they sank about 11% to $57.75 at market close. That day, Hedgeye Risk Management described Reddit’s stock as “grossly overvalued” in a report cited by Bloomberg News, adding the company was on the firm’s “short bench.”

Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Huffman sold 500,000 shares. Ben Silverman, vice president of research at Verity, told CNBC the move was expected and represents just “a portion of his holdings.”

Meanwhile, Reddit Chief Operating Officer Jennifer Wong disclosed that she sold 514,000 shares and now holds 1.4 million of the company’s shares.

“There’s always a bit of a disconnect, because the purpose of bringing the company public is twofold,” Silverman said. “It’s not just to generate liquidity for the company itself so that it can expand and grow. In these situations, it often allows insiders to cash out to generate liquidity, and that’s something executives have to consider here.”
Click to expand...

Source:
 
Cyberpunkd

Cyberpunkd

Member
Draugoth said:
Reddit has the worst moderation of any website in the entire internet, the company has their entire website held hostage by their moderator community because they don't want to pay actual funcional human beings. The entire website can be effectively shutdown by the mods if the company does something they don't like
Click to expand...
This. The people on a power trip as mods are something. You can read sub rules 10 times, your new thread will still get locked because F U.
 
Maiden Voyage

Maiden Voyage

Gold™ Member
SJRB said:
Classic pump & dump?
Click to expand...

C-suite obviously wanted to cash out some of their shares, caring less about their stake of equity. This was their payday they've been waiting for.

That said, I think almost everyone realized the stock was overvalued at the rate at IPO price, given the lack of profit. Unless Reddit somehow becomes a cash generator, the stock will likely continue to slip. Maybe it works out for those who bought in over the long term, maybe not.

I'd venture guess if they do begin to have a profit, the user experience will go to shit (it's already been on the downhill for a while). Honestly, if you're a mod or a heavy user, it seems like a lose/lose situation to me.
 
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