Reddit dips day after strong NYSE debut

By Thomson Reuters Mar 22, 2024 | 5:05 AM

(Reuters) – Social media platform Reddit’s shares ticked down 2.6% before the bell on Friday, a day after it notched a 48% gain in its debut on the New York Stock Exchange.

The company’s share sale was closely watched for more clues about investor interest in new share issues following a prolonged freeze in the market. Trading in the stock over the next few weeks could determine the IPO plans of other loss-making tech startups, analysts have said.

Although the company has yet to post an annual profit since its launch in 2005, Reddit still got a warm reception from investors on Thursday and achieved a valuation of $9.52 billion at the end of the trading session.

Popular investor Cathie Wood’s ARK Invest also bought nearly 10,000 shares of the company on Thursday, an email from the asset manager showed.

But users on Reddit’s largest stock trading forums have expressed skepticism about the company, despite it becoming the platform of choice for retail traders during the “meme-stock” frenzy of 2021.

Recent Reddit comment threads about the IPO have focused heavily on the site’s lack of profitability, with some users on the popular “wallstreetbets” forum looking to buy put options – a bearish bet – on the stock.

(Reporting by Niket Nishant in Bengaluru; Editing by Anil D’Silva)