What to Know About Reddit’s IPO: The Inside Scoop

Why the social media company’s public debut matters – and trading it from here... [Derby City Daily logo]( [Derby City Daily logo]( March 22, 2024 [What to Know About Reddit’s IPO: The Inside Scoop]( By Megan Brantley We haven't seen a major social media company go public since Pinterest (PINS) in 2019... Reddit (RDDT) ended the drought yesterday with its highly anticipated IPO. Shares soared 38% above the offer price on its trading debut, opening at $47 each and valuing the company at $8.87 billion. After popping 70% immediately following its IPO, shares settled and closed just above $50. This name is of special interest to us at LikeFolio. After all, it does help to power our proprietary signals. And it should be on your radar, too. What Is Reddit? And Why Does It Matter? Reddit is a social network that’s often called the "front page of the internet." With 73 million unique daily visitors, that means lots of users having lots of conversations... Which means lots of data for [artificial intelligence (AI)]( and machine learning companies to tap into. In fact, Reddit's data stream has become an important part of LikeFolio's own research process. We added the company formally to our ingestion process last year after testing its stream of messages for quality and quantity. So – just how often are users chatting about products and services of publicly traded companies on Reddit? Often. We processed 1,230,030 items – or positive matches to our brand-mapping database – in the last 24 hours alone and nearly 30 million in the month of February. The company is successfully attracting more eyeballs to its site. Consumer searches for “Reddit” are currently at all-time highs: Google Trends And qualitative review from mentions on a competitive peer’s site (X) show users often trust Reddit more than they trust Google (GOOGL) when trying to get to the REAL search query result. Despite its significant cultural impact since its 2005 launch and its role in the 2021 meme stock frenzy, Reddit acknowledges it is in the early stages of monetizing its platform and has not yet turned an annual profit. RECOMMENDED LINK [A.I. Expert Reveals: “2024 Election Year A.I. Blitz”]( On Wednesday, March 27th at 8 pm ET, A.I. expert Luke Lango is going public with Washington’s shocking “A.I. Blitz.” He says if you act now, this could be a historic shot at A.I. wealth triggered by the federal government. Already, 33 members of Congress, along with 79 Wall Street banks, are positioned to profit. [Click here now to see how to secure your spot because...]( In the next 30 days, this shocking “A.I. Blitz” could all be over. What Should Investors Take Away from This? Reddit's IPO performance could influence the broader IPO market, especially for tech companies eyeing public debuts. A strong showing might embolden other companies to move forward with their public offerings, while any weakness could lead to hesitation and reevaluation of market conditions. So far, the market looks receptive of RDDT and its growth potential. ✓ Reddit is eyeing data licensing as a key revenue driver, having secured deals worth $203 million over two to three years and expects to recognize $66.4 million from these arrangements this year. ✓ Additionally, an expanded partnership with Google aims to further monetize Reddit's vast data trove by enhancing AI models and Google's product offerings. But expect some near-term hiccups as Reddit gets its sea legs. Volatility in Store As a publicly traded company, Reddit will be subject to greater scrutiny from investors, regulators, and the public. This could lead to increased transparency and accountability, but it may also put pressure on the company to prioritize short-term financial performance over long-term growth and user experience. Some of its most zealous users view Reddit’s IPO as caving to "The Man" and corporate profits. Trading RDDT from Here From a trading perspective, Reddit has some unusual risk exposure. The company’s decision to offer shares to its most loyal users as part of its IPO is a unique strategy aiming to deepen the sense of ownership among its community, particularly among those who significantly contribute to the platform's content and management. This approach could foster even greater loyalty and generate positive public relations by aligning the interests of Reddit's user base with the company's long-term performance. However, this move also carries risks, notably if the stock price falls post-IPO, potentially leading to dissatisfaction among these new investor-users, even sparking panic selling. RECOMMENDED LINK [Crypto Pioneer: Do NOT Listen to these people]( The so-called experts are at it again, calling crypto investors “idiots” and Bitcoin a “hyped-up fraud.” But crypto pioneer Charlie Shrem says to ignore these people. In 2018 alone, over 100 media sources proclaimed the death of Bitcoin. It’s up 1,825% since. [Now, Charlie’s found five altcoins he thinks will soar](. Internally Speaking On our end, we’ll be watching for platform adoption and expanded audience segments. As it stood at the end of the third quarter (2023), nearly 64% of Reddit’s users were male. Widespread efforts for growth may place the platform more in the mainstream and attract a larger sample size and range of discussions, which only stands to improve the quality of our data and signal. With Reddit’s IPO top of mind for investors right now, and our unique connection to this name, we wanted to get this special report in your hands immediately. I also want to make sure you saw [Wednesday’s]( time-sensitive issue of Derby City Daily, featuring two stocks with fast-approaching catalysts that should be on every investor’s radar – one triggering as soon as April 7. [Get that story here](. We've also got a number of special events happening around here next week, so be sure to open your invitations to those below... Enjoy, [Megan Brantley signature] [Megan Brantley signature] Megan Brantley VP of Research, LikeFolio Mark Your Calendar: Important Investor Events Happening Next Week 📅 Masters in Trading Live: Monday, March 25 at 11:00 a.m. ET Masters in Trading Live is a brand-new perk from TradeSmith, where you’re invited to get a trade a day – every day the markets are open – completely free. How? It’s easy: [Click here to be automatically added to the list]( and tune in for Masters in Trading Live with Jonathan Rose every weekday at 11:00 a.m. ET. 📅 Urgent Election Year Briefing: Wednesday, March 27 at 8:00 p.m. ET On Wednesday, March 27, at 8:00 p.m. ET, Luke Lango is going public with his #1 AI trade for the 2024 election year – [and you’re invited to join](. After analyzing over 70 years of election market data, Luke's been ahead of many of the market’s most shocking moves in the last four years. This guy was ranked the #1 stock picker out of over 15,000 analysts in 2020, according to Tip Ranks – all thanks to his buy recommendations leading into the 2020 election. In 2022, he did it again, nailing the bottom for stocks – and accurately predicting stocks would skyrocket after the 2022 midterm elections. [That’s why we had to get this invitation in your hands](. We’re in an election year... AI is surging... and the stakes are higher than ever. 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