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Reddit ad in the New York Stock Exchange
Photo: Yuki Iwamura / AP
Strong price jump at the start: The online platform Reddit has started trading on the New York Stock Exchange under the ticker symbol “RDDT”. The share price temporarily rose by more than 55 percent in the first minutes after the company's stock market debut. Reddit had priced its IPO at $34 per share before its launch on Thursday. By early afternoon the price had already climbed to $53. Reddit and the previous shareholders received around $750 million from the IPO.
Experts had expected the stock to make a high entry. "Supply is pretty limited and there is strong demand, so I have a feeling this will be a hot IPO," predicted Reena Aggarwal, director of Georgetown University's Psaros Center for Financial Markets and Policy, earlier in the day. »The good news for Reddit is that it is a hot market.«
It remains to be seen whether the share price will continue to develop so positively. Aggarwal believes that the initial surge could be followed by a price drift as some sell their Reddit shares to cash in on their profits. The San Francisco company reserved around eight percent of the shares going public for particularly active users. There are no holding periods for them as there are often for other investors - this means that they can sell the securities from day one.
With the IPO, the company aims to overcome a nearly 20-year history of continuous losses and build a sustainable business. In the last quarter, the platform had an average of 73.1 million daily users. About half of them came from the USA. Reddit increased sales last year from 666.7 million to 804 million dollars (613.01 million to 739.25 million euros). The loss fell from $158.6 million to $90.8 million.
eru/AP/dpa