power users who participated in the company’s IPO made millions of dollars as a group after the company’s stock jumped big on its first day on the market.
While Redditors, in an interview with CNBC before the offering, said they were opting out of the IPO as a consequence of concerns about the business and the company’s often strained relationship with moderators, CFO Drew Vollero he told Axios that tens of 1000’s of users ended up buying shares.
The company’s shares rose 48% of their Thursday debut, closing at $50.44, compared with the offering price of $34.
Some Redditors – together with company insiders and their friends and members of the family – were in a position to join the IPO through the company’s shared sharing program (DSP). This is a model utilized by firms like , to reward their loyal users and customers.
Of the 22 million shares that Reddit and existing stakeholders sold in the offering, roughly 1.76 million were made available via a DSP, representing 8% of the deal. Shares were offered based on a user’s popularity, measured by what the company calls karma.
Since Reddit’s DSP has no lock-up period, participants can sell shares immediately, unlike company insiders and early investors who need to wait around 180 days. Shortly after the IPO, the company’s shares rose as high as $57.80, with some users saying they sold after the early rally.
One Redditor with the username LearnedButt taken over on the r/Reddit forumIPO made a profit of $20,000 after its first pop. The user said he sold the stock at $54 per share.
“Even if it gets to 100 shares, I don’t mind and don’t feel an ounce of FOMO,” LearnedButt wrote, using an acronym for fear of missing something. “That’s 20,000 I didn’t have an hour ago.”
In response to LearnedButt, Reddit user friskevision wrote: “Even though I didn’t invest as much as you, I made a quick $1,500. Reddit is finally paying me back for all these years of using it. :)”
Meanwhile, user blackberrydoughnuts expressed regret that he sold too late when the stock dropped below $50.
“I sold 1,000 shares at $48 and I regret not selling sooner when the price was $54!” wrote blackberrydoughnuts. – I actually should!
Redditors used e-commerce purchase shares via a DSP that was only available to US residents.
Reddit user Reepiccheepee made a small investment in the stock.
“I just sold 15 for $50,” Reepiccheepee said. “I saw the price falling and decided to make a profit. However, a small amount – $250! I will continue to watch the price throughout the day to see if I made the right decision…
While some Reddit users wanted to make a quick buck, others, like the follysurfer, plan to become long-term Reddit shareholders.
“I have 20 shares,” wrote the follysurfer. “I guess I’ll keep them for 20 years and see what happens.”
Stock chatter on Reddit is a familiar topic and one of the the explanation why the site is so well-known.
The Wallstreetbets subreddit has also change into known for its role in supporting the 2021 meme stock boom and the meteoric rise of stocks like and .
Reddit CEO Steve Huffman acknowledged the importance of Wallstreetbets in an interview with CNBC on Thursday, brushing aside concerns that the vocal community could cause any problems on Reddit’s first day of trading.
“The beautiful thing about Reddit is that they tell it like it is,” Huffman said. “But you have to remember that they’re doing this on Reddit. It’s a platform they love, it’s their home on the Internet.”
Redditor erjo5055 said on the Wallstreetbets forum: “I think using this site for almost 10 years has finally paid off. I wish I had bought more shares, I was going to buy 2 times as much.”
Reddit user Galactic replied, “High five, DSP buddy,” and added, “I never thought this site would make me money, but here we’re!”
One Wallstreetbets commentator, PatrickBateman-AP, issued a warning to anyone who hasn’t sold yet.
“Tomorrow it will go completely down,” wrote PatrickBateman-AP.
