Reddit Options to Begin Trading Monday Amid IPO Launch
Reddit Options to Begin Trading Monday Amid IPO Launch
After an opening-day surge, the stock falls only 1.5% in its second day of trading
Reddit is holding most of its gains in second day of trading after its debut surge.
The IPO market appears likely to accelerate following the successful Reddit launch, and successes in European IPOs.
RDDT options are scheduled to list on Monday, pending approval.
The long-awaited IPO of the year has come, and Reddit (RDDT) had a largely successful first day of trading on yesterday when the company’s initial public offering (IPO) was listed on the New York Stock Exchange (NYSE). It rose nearly 50%, eclipsing its targeted IPO valuation.
The surge was a welcome sign for markets that have seen a series of IPO flops over the past several years. Reddit hasn’t notched a profit in nearly 20 years, and it’s the first social media IPO since Pinterest (PINS) debuted in 2019.
While that type of momentum would be hard to maintain, RDDT held much of those gains, dropping only 1.5% today through early afternoon trading. Still, the stock is holding most of its gains from yesterday, which is encouraging for investors going into the weekend.
Prominent investors also joined in on purchasing Reddit shares, with Cathie Wood’s ARK Invest scooping up almost 10,000 shares of Reddit on yesterday to its ARK Next Generation Internet exchange-traded fund (ETF) and its ARK Innovation ETF (ARKK), according to an email from ARK Invest.
Global IPO market may rebound following successful launches
The so-far successful launch of RDDT on the NYSE may invigorate the IPO market and encourage other companies to move forward with listings. That would be positive for the market overall and open access to capital for companies struggling to profit in today’s high-rate environment.
Europe also sent an encouraging signal that may help further warm the waters for the global IPO market. On Friday, Galderma (GALD.S) debuted on Europe’s market, marking the largest IPO since Porsche (POAHF) was listed in 2022. Galderma surged nearly 20% above its list price overnight in Europe.
Trading Reddit
Next week will bring a new round of excitement for traders, with Nasdaq planning to list options on RDDT on all six of its exchanges, starting on March 25, according to a Nasdaq spokesperson.
However, many in the popular WallStreetBets subreddit aim to short the stock through buying put options, with many users seeming very eager to see the share price tank. Whether that happens is anyone’s guess, but it makes for an interesting story. Get your popcorn ready.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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