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Reddit IPO: Stock jumps on first day as a public company CNN Business

Forex TradingNovember 2, 2022

what is reddit doing to the stock market

Less regulation will likely mean higher profits and higher earnings for publicly traded companies. As usual, this sigh has been followed by good post-election growth. Between election day and Thanksgiving week, the S&P 500 index of large company stocks rose nearly 5%. Looking ahead at the next couple months, the market period between election day and inauguration day (January 20) has usually been pretty good. Angelina Hu, global head of investor relations at SALT Venture Group, cites ongoing economic slowness in China as a potential limitation for stock market growth in 2025.

Investors valued the popular site at nearly $9 billion US when trading opened

One uncertainty is whether AI can deliver on its promises of efficiency and productivity. Billions are being spent on AI development and the return outsourcing de desarrollo de software expectations are high. Many experts believe AI will prove itself, fueling higher earnings expectations and, in turn, higher stock prices.

My typical goal is to make 800 a week from these plays which I use to fund new call positions. I failed a lot while trading before, during, and after succeeding. I haven’t counted it up, but it’s likely I encountered losses in excess of $150,000 from making mistakes that were easily avoided, rash decisions, and not giving myself enough time to test out strategies. Net net, I’m up $500,000, but I was asked to share some of what worked for me over IM quite a bit after my last post and figured I’d lay it for others who may not want to waste money learning the hard way, as I did. Catherine Brock covers investing, stock market news and related money matters.

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He cites changing tariff policies and geopolitical tensions as potential catalysts. You may remember that 2022 was the year the Fed began raising interest rates to combat inflation. Those moves raised bond yields, encouraging investors to shift away from stocks in favor of debt securities. In reality, there are real risks and uncertainties in play for 2025.

Why it took so long for Reddit to go public

  • Three sectors to watch next year are technology, healthcare and energy.
  • Reddit, one of the original social media companies, is finally making its debut on the New York Stock Exchange — more than a decade after many of its peers.
  • That way, if the sector only moves 5%, I can still make money provided the price increase moves quickly enough.
  • Ed Mahaffy, president and senior portfolio manager at ClientFirst Wealth, Legacy & Estate Planning, has a more bullish outlook.

“There’s really substantial growth potential when it comes to certain places outside the US, particularly ones where English is a primary language. India has been highlighted, for example, as a very substantial opportunity,” said Scott Kessler, global technology sector lead at research firm Third Bridge. He added that Reddit is available in fewer than 10 languages, meaning the company could also find new growth by making the platform accessible to more users around the world. It’s been a rough few years for the IPO market — and successful IPOs typically beget dowmarkets other successful listings. That means Redditors and moderators will be able to sell their shares immediately if they wish.

Still, there may be no time like the present for Reddit to go public. The social media industry is bracing for a potential shakeup if a bill that could see TikTok banned in the United States — which has already passed the House — progresses further. Reddit, one of the original social media companies, is finally making its debut on the New York Stock Exchange — more than a decade after many of its peers. I am embarrassed to say I lost a lot of money listening to analyst opinions and believing their price targets were rooted in reality. It’s easy to get caught up in the excitement of an upgrade and if 4 analysts are all touting the stock at the same time it can create a bit of a ponzi effect, which is tradable.

Reddit has been around since the early days of social media. Here’s why it’s finally going public now

The site relies on users who volunteer as moderators called “mods” to make sure other Redditors follow guidelines — a uniquely non-obtrusive approach to online content moderation that also gives mods the power to destabilize the site. Investors valued the popular discussion forum site at nearly $9 billion US when trading opened, well above the company’s target valuation of $6.4 billion. Although his founder’s letter leading up to this IPO didn’t mention it, Huffman touched upon the company’s past turmoil in another missive included in a December 2021 filing attempt that was subsequently canceled. Reddit has never profited from its broad reach while piling up cumulative losses of $717 million. That number has swollen from cumulative losses of $467 million in December 2021 when the company first filed papers to go public before aborting that attempt.

Such is their distaste for changes made in recent years, a search on the platform for chief executive Steve Huffman – username u/spez – review: investing in the next big thing shows that when Redditors mention him the comments are usually preceded by foul language. That is because companies like OpenAI, the developer of ChatGPT, will pay for data of those random conversations. But the filing brings to the forefront a question that has been bubbling for years behind the scenes – how can a business make money from what is, essentially, random conversations.

what is reddit doing to the stock market

And Reddit is a treasure trove of exactly the kind of training data that always-hungry, large language model AI companies need, which bodes well for this to become a serious growth part of its future business. Reddit stock’s much-anticipated public debut has finally arrived, and it’s been a big success for the company. The social-networking site raised roughly $519 million by selling shares, and gains for the stock upon hitting the market have pushed the company’s valuation up to roughly $7.6 billion. While that’s still below the approximately $10 billion private valuation the business garnered a few years ago, there’s clearly appetite for the stock — and upcoming moves from the company could help to send its share price higher. They have a lot of news alerts but only for the types of events that matter and are organized thematically.

The initial public offering (IPO) on the New York Stock Exchange gives the public an opportunity to invest in the company’s stock for the first time, under the ticker RDDT. By the tech industry’s standards, Reddit remains extraordinarily small for a company that has been around as long as it has. Thursday’s opening debut valuation of $9 billion, for example, is still far below the $1.2 trillion market value boasted by Meta Platforms — whose biggest social media service Facebook was started just 18 months earlier than Reddit.

These interest-bearing bonds are a form of IOU, to be paid from future FICA tax receipts. It’s also been a rough few years for the IPO market — and successful IPOs typically beget other successful listings. One of my favorite options strategies is to buy long dated calls at the money for sector ETFs that underperformed the previous year. I buy calls with expirations in 6-9 months, knowing that I will sell at my exit point which for me is a 100% gain.

So looking at P/E ratios is not apples to apples – it’s just a way to note if historically that sector is at the high end of its own typical valuation range. The level of animal spirits among investors was already high before the election. The market’s reaction since shows that, if anything, these spirits have become more enlivened. This positive investor sentiment, along with economy-driving positive consumer confidence, seems poised to persist with economic growth.

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