Social media company Reddit recently priced its IPO at $34 per share. Its platform is home to millions of online forums under one umbrella, a granular approach that allows for thorough coverage of everything from gardening to 80s cartoons to online piracy.
And apparently, Wall Street was at least somewhat interested, as Reddit priced its IPO at the top of a projected range that ran between $31 and $34 per share. The offering alone has raised about $519 million, and now, Reddit is valued at $6.5 billion. This is the first time since 2019 that a major social media site—then it was Pinterest (NASDAQ:PINS)—has gone IPO.
Overcoming Internal Struggle
Yet, even as Reddit’s IPO is starting to look like a pretty closely-watched development, there are some signs of internal strife. For instance, yesterday, we found that Reddit’s offer to extend shares of the IPO to its biggest users—known as Redditors—was frequently going on deaf ears.
Another distressing sign from within comes from r/wallstreetbets, a subreddit—one of the individual message boards that comprise Reddit—that was at least partially responsible for the “meme stock” phenomenon of the early 2020s doesn’t much care for Reddit stock.
A leading comment on the subreddit labeled Reddit’s plan a “pump and dump,” a view applauded by over 2,300 other Reddit users. Meanwhile, others are dying for a chance to short the stock already. One user declared: “Can’t wait to short this cess pool after the initial pump.”
What Is the IPO ETF Forecast?
The Reddit IPO is still in its early stages, so for comparison, we’ll look at the Renaissance IPO ETF (NYSEARCA:IPO). A look at the last five trading days for the Renaissance IPO ETF shows it’s up just over 5.5%. Though it’s a hair off its highs for the last five days, it’s clearly gained quite a bit of ground in a fairly short time.
