Reddit’s moneymaking potential has attracted some prominent supporters,including OpenAI CEO Sam Altman,38,who accumulated a stake as an early investor that has made him one of the company’s biggest shareholders. Altman owns 12.2 million shares of Reddit stock,according to the company’s IPO disclosures,leaving him with a stake worth around $US615 million ($936 million) after the opening day of trade.
“This volatility is not surprising because there has been a lot of buzz around Reddit,” Reena Aggarwal,director of Georgetown University’s Psaros Centre for Financial Markets and Policy,noted.
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When Reddit’s price initially jumped,she explained,some investors who got an allocation may have sold their shares to cash in on the gains,bringing it back down. She noted that this could to continue in the stock’s early days.
Reddit’s IPO will test the quirky company’s ability to overcome a nearly 20-year history coloured by uninterrupted losses,management turmoil and user backlashes to build a sustainable business.
The interest surrounding Reddit stems largely from a large audience that religiously visits the service to discuss a potpourri of subjects that range from silly memes to existential worries,as well as get recommendations from like-minded people.
About 76 million users checked into one of Reddit’s roughly 100,000 communities in December,according to the regulatory disclosures required before the San Francisco company goes public. Reddit set aside up to 1.76 million of 15.3 million shares being offered in the IPO for users of its service.