Reddit shares rise 30% one week after social media company IPO | Wilnesh News

Reddit Shares jumped 30% on Monday as investors continued to snap up the stock following last week’s initial public offering.

The stock debuted at $34 on Thursday and closed at $59.80. Reddit and existing investors raised a total of about $750 million in the offering.

Reddit’s stock price soared 48% on its first day of trading on the New York Stock Exchange. Many moderators and users (known as Redditors) make millions of dollars as a group. Along with friends and family, they participated in Reddit’s IPO through a targeted sharing program, a model previously used by Airbnb, Rivian and Doximity.

OpenAI CEO Sam Altman, an early investor and former board member of Reddit, grew his stake in the company from $200 million to more than $613 million after its debut.

Reddit IPO comes the same week as data center hardware provider Astra Labs Nasdaq soared 72% on its first day of trading. Reddit is the first major social media company to go public since Pinterest went public in 2019, and investors are watching its performance closely to gauge whether the IPO market will rebound after a long lull on rising interest rates and concerns about inflation starting in 2022. .

Lo Toney, founding managing partner of Plexo Capital and a Reddit shareholder, told CNBC that Reddit’s debut “is a positive sign not only for Reddit, but I think it’s a positive sign for the tech industry as well, which will hold up for future IPOs.” Could mean something.”

“One thing we know for sure is that there was a lot of investor interest during the Reddit roadshow, and we see that interest continuing well,” Tony said. “Obviously, the market is signaling an appetite for more companies to come to the public markets. “

Still, Toney said there are other “dynamics” that need to happen, including more companies entering the public markets, before the floodgates can be said with certainty to have opened. Tony noted that some startups have already raised significant amounts of capital, so they may not be in a rush to go public and raise more cash.

“At the same time, in some cases, the last private market financing may be higher than the public company valuation accepted by the public market,” Toney said.

Reddit was valued at $10 billion in private markets at the time of its last funding round in 2021, and would be valued at about $6.5 billion based on an IPO price of $34 per share, according to deal tracking service Pitchbook.