Reddit IPO and Stock Performance | Where Does RDDT Go From Here?

Reddit recently IPO'ed on March 21st, 2024, and after a quick rally, the stock fizzled out. In this article we take a look at the IPO, the Reddit stock, the release of options, and much more. We breakdown of the company's journey into the public markets and the potential trajectory for investors. 

Lets start with Reddit's IPO debut, which occurred on Thursday, March 21st. Notably, the IPO price was set at $34 per share. However, the stock opened at $47 per share, representing a remarkable 38% increase on the first day of trading. This significant surge provided early investors with substantial gains following the IPO. However, we have unveiled an interesting fact: 8% of Reddit's IPO was reserved for its most loyal users and moderators, who were allowed to sell their stock immediately without any lockup period. This departure from the typical lockup period practice demonstrated Reddit's unique approach to involving its community in the IPO process.

Despite generating $804 million in revenue, Reddit reported a significant loss of $90.8 million. This raises questions about the company's path to achieving profitability as a publicly traded entity. However, there is potential for Reddit to pivot towards becoming an AI play. By leveraging its vast user base and content, Reddit has the potential to contribute valuable data for AI development. Partnering with companies like Google, Reddit could offer insights into everyday language and user interactions This could potentially position itself as a data source for AI.

Diving into Reddit's stock chart, we can see the wild ride it has taken during its first week. After the release of options, things got even more thrilling. The options market flooded with speculation, and the stock price shot up. With this being said, its important for investors to prioritize profit-taking, as well as cautious decision-making. There is a definite need to identify predictable patterns before considering investment or trading opportunities.

[00:00:00] Reddit's stock, trading, and financial challenges summarized.

[00:03:00] Reddit as potential AI play, Google involvement.

[00:07:40] Reddit options unleash speculation, money-making opportunities.

[00:09:25] Largest options purchased and stock speculation activity.

[00:12:29] See you on the next video.