After Reddit’s IPO this year, its stock price soared by 30%. It seems that investors are not afraid of the recent market unpredictability and are showing their support for this beloved social media platform, pushing its stock price from an initial $34 to $59.80 at Monday’s close.
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Reddit’s Bull Market Shines, Benefiting Long-time Users
OpenAI CEO Sam Altman Profits from Reddit as well
What Does Reddit’s IPO Mean for the Tech Industry?
Reddit’s stock skyrocketed by 48% during its first day of trading on the New York Stock Exchange. It not only attracted attention, but also brought substantial returns to the platform’s moderators and passionate users, collectively known as Redditors. Through a directed-share plan similar to Airbnb and Rivian, Reddit provided these core community members with a rare opportunity to participate in the IPO, earning them millions of dollars in bonuses.
One of the notable beneficiaries of Reddit’s market performance is Sam Altman, the CEO of OpenAI and an early investor and former board member of Reddit. Altman’s stake in Reddit surged from $200 million to $613 million after the IPO, highlighting the lucrative potential of early-stage tech investments.
The IPO frenzy of Reddit aligns with Astera Labs’ 72% stock price increase during its initial public offering on Nasdaq, reigniting people’s interest in the IPO market. Reddit’s successful public offering, as the first major IPO from a social media entity since Pinterest in 2019, is closely watched as a future indicator for tech IPOs, especially amid concerns about rising interest rates and inflation in the market.
Lo Toney, the founding managing partner of Plexo Capital and a Reddit shareholder, believes that Reddit’s IPO is a ray of hope for the entire tech industry. According to Toney, strong investor interest has been observed for Reddit since its roadshow, indicating that the market is ready for more tech companies to go public. However, he cautions that several more successful cases are needed before announcing a full IPO revival.
Despite the excitement, Toney also points out future challenges, including the disparity between private market valuations and public market expectations. For Reddit, its valuation in the last private funding round in 2021 was $10 billion, while its IPO valuation adjusted to approximately $6.5 billion, highlighting the complexities of transitioning from the private market to the public market.
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Reddit Applies for IPO, Holds BTC and ETH, Sam Altman is also an Investor
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