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Reddit stock surges after first day of options launch

Reddit shares rose on Tuesday (March 26) as it continues to aggressively roll out stock options.

An 11% increase to the current price of $67.5 would add more than $1 billion to the social media platform’s market capitalization, while also putting it on track to double its IPO price of $34.

Reddit is a San Francisco-based website that combines elements of social media, message boards, and news aggregation. The platform was founded in June 2005 by Steve Huffman and Alexis Ohanian, who sold the platform to Condé Nast the following year. Hoffman left the company in 2009 and returned as CEO in 2015.

The company is seeking to list on the New York Stock Exchange at a valuation of up to $6.4 billion.

Reaction to Reddit share price rise

Jeremy Goldman, senior director of client briefings at Emarketer (formerly Insider Intelligence), talks about early trading and returns on new stocks.

“More bullish investors bought options on Reddit, part of the company’s early stock market success in its first full week of trading,” he said.

Goldman Sachs added: “My estimate is that approximately 90,000 options have changed hands, possibly more.”

The introduction of the options on Monday attracted heavy bets on the stock, which closed up about 30% and made Reddit the top gainer on the New York Stock Exchange.

If the current trajectory holds, the company is well positioned to top its $640 million target, and Reddit was valued at $10 billion in a 2021 private funding round.

Lo Toney, founding managing partner of Plexo Capital and Reddit shareholder, told CNBC that Reddit’s debut is “a positive sign not only for the company, but I think it’s a positive sign for the tech industry as well, and what that could mean for future IPOs.” What.”

“One thing we know for sure is that there was a lot of investor interest during the Reddit roadshow, and we see that interest continuing well.”

Tony added: “Obviously the market is indicating an appetite for more companies to enter the public markets.”

Featured Image: Generated by Ideogram

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