The floor of the New York Stock Exchange is gearing up for social media platform Reddit’s initial public offering in New York City on March 21, 2024.
Spencer Pratt | Getty Images
reddit After experiencing a rally stemming from the social media company’s IPO last week, the stock price has fallen sharply.
The stock closed at $49.32, lower than its closing price on the first day of Reddit trading on the New York Stock Exchange, ending the week. Last Thursday’s closing price was $50.44. The stock market is closed on Good Friday.
Reddit stock began its slide on Wednesday, dropping about 11% to $57.75 at market close.That day, Hedgeye Risk Management called Reddit stock “significantly overvalued” in a report. quoted Bloomberg News added that the company is part of the company’s “short bench.”
Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Huffman sold 500,000 shares. Ben Silverman, Verity’s vice president of research, told CNBC that the move was expected and is just “a portion of his holdings.”
Meanwhile, Reddit Chief Operating Officer Jennifer Wong revealed that she sold 514,000 shares and now owns 1.4 million shares.
“There’s always going to be some disconnect because there are two purposes for taking a company public,” Silverman said. “It’s not just about creating liquidity so that the company itself can expand and grow.In situations like this, insiders often end up putting out cash to create liquidity. must take that into account.”
“If the outlook is so bright, why are insiders selling?” Silverman added.
Reddit stock started the week strong, jumping 30% on Monday. The company’s stock subsequently rose 8.8% on Tuesday to close at $65.11, despite New Street Research issuing a neutral rating on the company.
Analysts at New Street Research said in a note that they do not plan to change their $54 price target and “movement is expected upon initial earnings report.”
