Reddit (RDDT) entered its first full day of trading on the New York Stock Exchange on Thursday since its IPO. Despite soaring 48% in its market debut, investors remain wary of potential volatility stemming from the company’s decision to offer shares to investors without a lock-up period.
Yahoo Finance Jared Bricle and sheena smith Break down the details
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Editor’s note: This article was written by angel smith
video transcript
– We monitor shares on Reddit. It’s down a bit this morning. And this is the company’s second day of trading. The move comes after the stock price soared 48% in its debut. And Sheena, finally, that pop we received was just after 1pm yesterday.
Therefore, these IPOs are announced a little later in the day. But there’s not much we should focus on. And many people look at this with the following eyes. Can you guess what this means for the broader M&A market, the broader capital market where you’re trying to sell your shares? I don’t know what the case is for this.
However, there were some concerns that there would be some volatility because they were selling directly to people without a lockup, but the volatility that investors generally tend to like seems to have picked up.
– Yeah, sure, it popped 48% on its first day of public debut here, its first day of trading on the open market. And it carries over some of the excitement earlier this week when Astera Institute stock rose just about 72%. I bring this up because Reddit has been trying to market itself, or at least position itself in the minds of investors, as a play on AI.
And over the next few quarters, you’ll be able to really leverage the strength and growth of AI and ultimately monetize your business. You could see some of that excitement yesterday by looking at the jump in stock prices. Additionally, Astera Labs had only about 70 units in stock and was up 72% on its first day of trading. However, it’s too early to tell if these two names can really be trending. But it shows excitement.
– I can feel the excitement. I think this is a broad conclusion since Reddit was able to make his one sale to Google. For what? 60 million dollars. And now everyone sees trillions of dollar signs. Sell Google and I’ll do the same.
I don’t know how much data is worth. I don’t know if there are others who do that. But my point is, that’s what we’re trying to figure out. I think this is old-school media play. They never tried to make any money or really set themselves up for monetization in 20 years.
It’s finally time to hit the market. But is there a plan? And I don’t know if that’s articulated yet.
– Yes, that’s right. And I think that’s why a lot of people are skeptical about this public debut and whether it can really prove that Reddit is on a sustainable path to profitability.
I think there are a lot of people involved in this, or at least keeping some of those skeptics on the sidelines for now. But again, Reddit’s stock price opened the day slightly lower. But after the stock price soared again, it was down almost 50% on the first day of trading.
