Reddit invested $750 million in the first days of the IPO: shares rose by 30%
Reddit and investors raised $750 million during the initial public offering of shares - prices increased by 30%.
Shares of Reddit were up 30% on Monday, March 25th, after investors bought them heavily after the IPO. The stock, which opened at $34, closed at $59.80, according to CNBC data.
- Reddit and investors raised about $750 million during the offering.
- Shares of Reddit surged 48% during its first day of trading on the New York Stock Exchange.
- Some Reddit moderators and users made millions of dollars thanks to a special program of selling shares during the IPO. This program allowed them and their families and friends to purchase shares directly from the company. This isn't the first time tech companies have taken this approach - Airbnb, Rivian and Doximity have done the same before.
- OpenAI CEO Sam Altman's investment, an early investor and former Reddit board member, has grown from $200 million to over $613 million since the company's IPO.
- Reddit's IPO came in the same week that shares of data center equipment maker Astera Labs surged 72% in their first day of trading on the Nasdaq.
Reddit became the first major social network to go public since 2019 (following Pinterest), and investors have been watching its success closely to gauge whether the IPO market could revive after a long hiatus due to rising interest rates and inflationary fluctuations starting in 2022.
Why is this important?
- Reddit's successful IPO may indicate that investors are ready to put money into tech companies again.
- This could provide an incentive for other tech companies looking to enter the market.
While Reddit is doing well, Plexo Capital managing partner and Reddit shareholder Lo Tony opines that it is too early to tell , whether the IPO market has fully opened. He believes that several more companies should successfully enter the market.
Additionally, Tony notes that some startups have already raised significant investment, so it may not be profitable for them to rush into an IPO. Sometimes the value of a company in the private investment market can be higher than its valuation after going public.
Shares of Reddit debuted on the New York Stock Exchange on Thursday, March 21st. The company's valuation, excluding employee stock options, was $5.4 billion, down significantly from its last private market valuation of $10 billion in August 2021.
Answers to questions
How much money did Reddit and investors raise during their initial public offering?
How much did Reddit shares go up after the public offering?
Which companies have previously used a program to sell shares to moderators and users?
How did OpenAI's CEO's investments fare after Reddit's IPO?
What other data center equipment maker saw its Nasdaq shares rise in the same week?
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Discussion of the topic – Reddit invested $750 million in the first days of the IPO: shares rose by 30%
Reddit's stock has soared due to intense investor demand, with its pricing showing a massive 30% increase in just the first few days after its IPO.
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Alice
Interesting news! This guarantees positive changes for the IPO market of technology companies.
Liam
Yes, Reddit was a long-awaited participant in the IPO. This could prompt other technology players to follow suit.
Sophie
Indeed, but Lo Tony is pondering. Perhaps some companies should approach the issue of going public more carefully.
Fabio
It is important to consider development prospects. Sometimes haste can be unprofitable.
Isabella
It is clear that the risks and potential benefits of an IPO should be analyzed in accordance with the specific situation of each company.
Grumpy
These trends and new buzz events make me laugh. In my opinion, there can be nothing good in this.