Shares of social media platform company Reddit Inc
What To Know: Reddit stock opened for trading on Thursday at $47 per share and immediately began moving higher. The company was initially targeting an IPO price between $31 and $34 per share before settling at $34 late Wednesday.
Several analysts were expecting the highly-anticipated IPO to get off to a hot start in public markets. Meridian Equity Partners' Jonathan Corpina told Benzinga this week that the IPO was five times oversubscribed and predicted that Reddit users and retail traders would rush into the stock in early trading.
Deepwater Asset Management's Gene Munster said investors should "grab the popcorn" and set the fundamentals aside for now and Wedbush's Dan Ives called the IPO a potential "watershed" moment for the tech industry.
Reddit reserved 8% of its IPO shares for its most loyal active users and moderators, as well as for some company insiders and their family and friends. Those investors will not be bound by a lock-up period, which could boost volatility in the name on Thursday.
Traders on Reddit, specifically on the well known subreddit r/WallStreetBets, have been discussing the IPO in recent weeks, but a lot of the talk has been negative. Reddit said in its S-1 filing that "meme stock" schemes on r/WallStreetBets could pose a risk to investors.
Reddit's long-awaited entry into the public markets has been in the works since the company quietly filed for an IPO in late 2021 after the platform's popularity soared as "meme stocks" dominated the news flow on Wall Street. The company then delayed its listing as markets cooled off in anticipation of rate hikes from the Federal Reserve.
Reddit is the first major IPO of 2024 and could provide a reading on the current state of the IPO market for other companies considering making the leap.
RDDT Price Action: Reddit shares were hovering around $52 at the time of publication, according to Benzinga Pro.
