Social media platform company Reddit Inc RDDT is set to make its public debut on the New York Stock Exchange on Thursday. Reddit co-founder and CEO Steve Huffman talked about the retail aspect of Reddit ahead of the company’s IPO.
What To Know: Reddit is best known on Wall Street as the home of r/WallStreetBets. In early 2021, several retail traders came together on the subreddit and sparked a massive short squeeze in original meme stocks GameStop Corp GME and AMC Entertainment Holdings Inc AMC.
Although r/WallStreetBets is the most well-known, there are several other subreddits on the platform where retail traders discuss markets on a daily basis.
One dynamic that stands out from Reddit’s IPO: the company reserved 8% of its IPO shares for active users and moderators on the platform.
Thursday on CNBC’s “Squawk On The Street,” Huffman said Reddit wanted to give retail investors the same opportunity that institutional investors would have in the IPO because retail traders are a “healthy component” of Reddit.
“Our goal there was to … I think as is the ethos of Reddit, level the playing field,” Huffman said.
Interestingly enough, Reddit warned in its S-1 filing that "meme stock" schemes on r/WallStreetBets could be a risk for investors. CNBC’s Julia Boorstin, who interviewed Huffman, said there has been a lot of negative chatter on r/WallStreetBets leading up to the company’s IPO.
The Reddit CEO told CNBC that he is a member of r/WallStreetBets and has seen a lot of the comments in recent weeks.
“That’s Reddit. Reddit is people. Reddit is a fun and special, but sometimes crazy place and so I wouldn’t expect anything less from our community,” Huffman said.
“Reddit is nothing without our users and communities and I think that’s the beautiful thing about Reddit is they tell it like it is. But you have to remember, they’re doing that on Reddit.”
Reddit priced its IPO on Wednesday at $34 a share, which was at the top of the expected range. The IPO values the company around $6.5 billion and should bring in approximately $519 million for Reddit. The company is selling about 15.28 million shares in the IPO, and existing shareholders are selling another 6.72 million shares.
Reddit stock is set to begin trading under the ticker symbol “RDDT” Thursday.
Photo: Shutterstock.
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