Slashdot: Reddit's Shares 'Plummet' Almost 25% in Two Days, Dropping Below Its First Day's Close

Reddit's Shares 'Plummet' Almost 25% in Two Days, Dropping Below Its First Day's Close
Published on April 01, 2024 at 03:42AM
Last Monday shares of Reddit's stock soared 30%, reports CNBC — and then another 8.8% on Tuesday. But the moves happened "even after New Street Research issued a neutral rating on the company" — and by the end of the week, CNBC was reporting that "Reddit shares are plummeting..." Shares closed at $49.32, ending the week below their closing price on Reddit's first day of trading on the New York Stock Exchange [on March 21st, when they closed at $50.44 ]... Stock markets are closed on Good Friday. Reddit shares began their downward spiral on Wednesday, when they sank about 11% to $57.75 at market close. That day, Hedgeye Risk Management described Reddit's stock as "grossly overvalued" in a report cited by Bloomberg News, adding the company was on the firm's "short bench." The article notes Reddit's CEO sold 500,000 shares in the company — nearly 40% of his holdings — which Ben Silverman, vice president of research at Verity, told CNBC was expected — while Reddit's COO sold another 514,000 shares. "There's always a bit of a disconnect," Silverman said in the interview, because bringing a company public "is not just to generate liquidity for the company itself so that it can expand and grow. In these situations, it often allows insiders to cash out to generate liquidity. "And that's something investors have to consider here. If the prospects are so bright, why are insiders selling?"

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