Reddit shares rise 30% to start week after social media company’s IPO

Reddit
shares
jumped
30%
on
Monday,
as
investors
continued
snapping
up
the
stock
following
last
week’s

IPO.

The
shares,
which
debuted
at
$34
on
Thursday,
closed
at
$59.80.
Reddit
and
existing
investors
raised
roughly
$750
million
combined
in
the
offering.

Reddit
shares
soared
48%
on
their
first
day
of
trading
on
New
York
Stock
Exchange.
A
number
of
moderators
and
users,
known
as
Redditors,

earning
millions
of
dollars
as
a
group.
Along
with
their
friends
and
family
members,
they
were
able
to
partake
in
Reddit’s
IPO
via
a

directed-share
program,
a
model
previously
employed
by
Airbnb,
Rivian
and
Doximity.

OpenAI
CEO
Sam
Altman,
an
early
Reddit
investor
and
former
board
member,
saw
his

stake
in
the
company
grow
from
$200
million
to
over
$613
million
after
the
debut.

Reddit’s
IPO
came
the
same
week
that
data
center
hardware
vendor


Astera
Labs
skyrocketed
72%
in
their
opening
day
on
the
Nasdaq.
Reddit
was
the
first
major
social
media
company
to
go
public
since
Pinterest’s
offering
in
2019,
and
investors
were
monitoring
its
performance
to
gauge
whether
the

IPO
market
might
pick
up
after
a
long
lull
due
to
rising
interest
rates
and
inflationary
concerns
starting
in
2022.

Plexo
Capital
founding
managing
partner
and
Reddit
shareholder,
Lo
Toney,

told
CNBC
that
Reddit’s
debut
was “a
positive
sign
not
only
for
Reddit,
but
I
think
also
the
tech
industry
and
what
it
might
mean
for
future
IPOs.”

“One
thing
we
know
with
certainty
is
that
there
[was]
a
lot
of
investor
appetite
during
the
roadshow
for
Reddit,
and
we
see
that
it’s
continuing
to
hold
up
well,”
Toney
said. “Clearly
the
market
is
signaling
there’s
an
appetite
for
more
companies
to
come
to
the
public
markets.”

Still,
Toney
said
there
are
other “dynamics
that
need
to
happen,”
including
a
few
more
companies
entering
the
public
market
before
it’s
safe
to
say
that
the
floodgates
have
opened.
Toney
noted
that
some
startups
have
raised
a
lot
of
money
so
they
may
not
be
in
any
hurry
to
go
public
and
raise
more
cash.

“At
the
same
time
there
are
instances
where
the
last
private
market
financing
may
be
higher
than
what
the
public
market
will
accept
as
a
public
company
valuation,”
Toney
said.

Reddit
had
a
private
market
valuation
of
$10
billion
in
2021
when
it
last
raised
a
funding
round,
according
to
deal-tracking
service
Pitchbook,
and
was
valued
at
roughly
$6.5
billion
based
on
its
IPO

price
of
$34
per
share.