How to trade the Reddit IPO
Trade as soon as the share price opens
Available on both account types
Costs kept low on this and all other markets
Low minimum trade sizes and stops available to manage downsize risk
ABOUT REDDIT
Reddit's stock surged after its IPO, hitting an intraday high of $57.80 before closing at $50.44, a 47% increase from its IPO price of $34.00. The stock continued its upward trajectory for the next three days, reaching an all-time high of $74.90, this is despite strong competition in its sector from well established big hitting players like Snapchat and META. Reddit’s IPO marks the first time a major social-media company has listed on US soil since Pinterest in 2019.
Since the IPO Reddit has also released their first earnings call as a public company. Although this earnings call was viewed as positive by insiders, the company is yet to turn an annual profit since inception. However, the narrower-than-expected loss brought some optimism to the market. Investors are hopeful that Reddit will achieve profitability by leveraging AI and increasing advertisements on the site. Reddit is already utilising AI to fully translate its site into various languages, with the French version already live and available for users. Reddit is also looking at ways to licence their data collected through the site in order to increase revenue.
Spread betting or CFD’s
You can trade on the Reddit IPO via either spread bets or CFD’s. These products allow you to speculate on the underlying price of an asset class including the Reddit IPO. You can learn more about these two products and the differences between them here.
How do IPOs work?
IPOs work by having a company put its shares up for sale to the public. Some common reasons for this include seeking to raise capital for business growth, decreasing or settling debts, positioning itself to better attract and retain talent, or increasing liquidity.
The IPO process starts off with a detailed audit of the company by an external resource – it must be conducted taking all the company’s financials into consideration. Next, a registration statement needs to be prepared by the business and filed with the appropriate exchange commission. If the commission grants approval, the company can then list a set number of shares at a price determined by an investment bank.
