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Redditors bank millions of dollars as a group on stock’s opening day

Reddit users who participated in the company’s IPO profited greatly from the stock’s significant increase on the first day of trading.

While CNBC interviewed Redditors prior to the offering, they said they were skipping the IPO due to concerns about the business and the company’s often tumultuous relationship with moderators, Chief Financial Officer Drew Vollero told Axios that tens of thousands of users eventually purchased shares.

The stock surged 48% in its debut on Thursday, finishing at $50.44, up from the $34 offer price.

Certain Redditors, along with corporate insiders and their friends and family members, were permitted to participate in the first public offering under the company’s directed-shared program, or DSP. Companies such as Airbnb, Rivian, and Doximity use this strategy to reward loyal consumers.

Reddit and existing stakeholders sold 22 million shares in the offering, with 1.76 million made accessible through the DSP, accounting for 8% of the total. The shares were provided based on a user’s reputation, which is measured by what the corporation refers to as “karma.”

Because Reddit’s DSP has no lockup term, participants can sell shares instantly, unlike corporate insiders and early investors, who must wait approximately 180 days. The stock rose as high as $57.80 shortly after the IPO, and several customers reported selling following the first spike.

One Redditor, LearnedButt, claimed on the r/RedditIPO thread that he made a $20,000 profit following the initial pop. The user stated that they sold the stock at $54 per share.

“Even if it goes to 100/share, I’m fine and have no FOMO,” LearnedButt added, using the abbreviation for fear of missing out. “This is 20K I didn’t have an hour ago.”

In response to LearnedButt, Reddit member friskevision said, “Although I did not invest as much as you, I did make a quick $1,500.” Reddit finally pays me back after all these years of utilizing it.:)”

Meanwhile, user blackberrydoughnuts expressed remorse for selling too late, after the stock fell below $50.

“I sold my 1000 shares at $48 and I’m sad I didn’t sell earlier when it was at $54!” Blackberrydoughnuts wrote. “I really should have!”

Redditors used E-Trade to purchase shares through the DSP, which was only available to US residents.
Reddit user Reepicheepee invested a tiny amount in the shares.

Just sold 15 for $50,” Reepicheepee stated. “I observed the price drop and decided to cash in. However, the net amount is only $250! I’ll continue to monitor the pricing throughout the day to determine if I made the proper decision…”

Though some Redditors were looking to make a fast buck, others, like follysurfer, intend to become long-term Reddit stockholders.

Got 20 shares,” follysurfer wrote. “Guess I’ll hold them for 20yrs and see what happens.”

Stock discussion on Reddit is a common topic and one of the reasons the site is so popular.

The Wallstreetbets subreddit contributed to the 2021 meme stock boom, resulting in the rapid rise of stocks such as GameStop and AMC Entertainment.

Reddit CEO Steve Huffman acknowledged the importance of Wallstreetbets in an interview with CNBC on Thursday, dismissing concerns that the loud community would cause issues on Reddit’s first day of trading.

“That’s the beautiful thing about Reddit, is that they tell it like it is,” Huffman told me. “But remember, they’re doing it on Reddit. It’s a platform they enjoy, and it serves as their online home.”

.Redditor erjo5055 commented in the Wallstreetbets thread, “I guess using this service for over ten years has finally paid off. I’m disappointed I didn’t buy more shares; I was going to buy twice as much.”

Reddit member Galactic replied, “High-5, fellow DSP dumper,” adding, “Never thought this site would make me money, but here we are!”

PatrickBateman-AP, a Wallstreetbets commenter, advised anyone who hadn’t sold yet to proceed with care.

“It will absolutely plummet tomorrow,” PatrickBateman-AP stated.



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