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Social media platform Reddit’s shares ended their first day of trading in New York up 48%, signaling that investor appetite for initial public offerings of promising yet loss-making companies could be returning.

Reddit, which has not turned an annual profit since launching in 2005, lured investors by positioning its content as training grounds for artificial intelligence (AI) programs. Reuters reported last month that Reddit struck a data licensing deal with Google worth about $60 million a year.

While Reddit still relies on advertising for the vast majority of its revenue, it touted AI in its IPO marketing roadshow as an area of growth. It also disclosed last week that the Federal Trade Commission is looking into its AI data licensing deals.

“At the core we are a growth company. Achieving our mission means that we want to grow users and community,” said Jen Wong, Chief Operations Officer at Reddit.

Shares of the San Francisco-based company opened at $47 on the New York Stock Exchangeon Thursday afterpricing at $34 in the IPO, the top of the company’s indicated price range. They ended trading at $50.44, giving the company a valuation of about $9.5 billion.

The IPO valued Reddit at $6.4 billion, and the company and its selling shareholders raised $748 million. Reddit was valued at $10 billion in a private fundraising round in 2021, and the strong stock market reception indicated that the company may not have needed to curb its valuation expectations so much to get the IPO off the ground.

Reddit’s long-awaited entry as a publicly traded company has been in the works for more than two years.

It confidentially filed for an IPO in Dec. 2021, but the stock rout due to the Federal Reserve’s quantitative tightening led to a delay.

The eyeball-grabbing debut will be a major test of the IPO market, where investors are seeing some green shoots, thanks to increasing bets of a soft landing.

“If Reddit trades poorly, it will cast a shadow over the IPO market.

Many companies will hit pause on their IPO initiatives,” said Julian Klymochko, CEO of alternative investment solutions firm Accelerate Financial Technologies.

Shares opened at $47 each versus the IPO price of $34 each.

Reddit’s popularity rose to new heights during the “meme-stock” saga of 2021 in which a group of retail investors collaborated on its forum “wallstreetbets” to buy shares of highly shorted companies like GameStop.

As part of its plan to reward its user base, Reddit has reserved 8% of the shares on offer for eligible users and moderators, certain board members, as well as friends and family members of its employees and directors.

It has also offered some shares to retail investors through online brokerage platforms Robinhood, SoFi Morgan Stanley Wealth Management and Fidelity Brokerage Services.

But the move is fraught with risks, analysts have said.

Typically shut out of bidding in an IPO, retail traders eager to gain exposure to a newly listed company buy shares only when they start trading, which could lead to a first-day pop.

Allowing early access to the IPO could dampen some demand.

Such buyers are also not under a lock-up period and could choose to sell when the stock starts trading, potentially increasing the price volatility.

“I don’t know one company which really benefits from allocating shares to their users,” said Alan Vaksman, founding partner at investment firm Launchbay Capital.

Stocktwits.com, the social media firm that analyzes posts and message volumes on its platform related to a company’s ticker symbol, showed retail sentiment for Reddit was “extremely bullish.”

But the discussion on Reddit’s “wallstreetbets” forum was more mixed, with some users saying they would short the stock after it starts trading.

After its launch in 2005, Reddit became one of the cornerstones of social media culture.

Its iconic logo — featuring an alien with an orange background — is one of the most recognized symbols on the internet.

Its 100,000 online forums, dubbed “subreddits,” allow conversations on topics ranging from “the sublime to the ridiculous, the trivial to the existential, the comic to the serious,” according to co-founder and CEO Steve Huffman.

Huffman himself turned to one of the subreddits for help to quit drinking, he wrote in his letter.

Former President Barack Obama also did an “AMA” (“ask me anything”), internet lingo for an interview, with the site’s users in 2012.

The frenzy for technology stocks might help Reddit get a good start, said Josh White, assistant professor of finance at Vanderbilt University.

“We don’t get many large tech IPOs. Those tend to be very popular because it’s hard to buy that kind of growth,” White said.

But despite its cult-like status in the social media world, the company has failed to replicate the success of its bigger rivals Meta Platforms’ Facebook and Elon Musk’s X.

The company has said it was “in the early stages of monetizing (its) business” and is yet to turn an annual profit.

Analysts said investors will be scrutinizing its roadmap to profitability.

“The real news is going to be after the first earnings call — where are they headed, what are the results looking like, what changes are they going to make,” said Reena Aggarwal, director of the Georgetown University Psaros Center for Financial Markets and Policy.

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UK

Starmer will be breathing a sigh of relief after clinching shock victory over SNP and Reform UK

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Starmer will be breathing a sigh of relief after clinching shock victory over SNP and Reform UK

Anything other than a win for Labour would have been a humiliation in this contest.

It wasn’t any old local by-election – this was a contest where Labour knew it could act as a mini barometer of Sir Keir Starmer’s recent U-turn on winter fuel payments and become a test of how popular the politics of Nigel Farage are in Scotland.

Labour are power hungry and have, for a long time, set their sights on forming the next Scottish government.

The prime minister will this morning be breathing a sigh of relief after clinching this shock victory over the SNP and Reform UK.

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New MSP’s message to Farage and ‘his mob’

This contest on the outskirts of Glasgow came at a time where Labour had been firefighting and grappling with polling suggesting they had blown their chances of ousting the SNP from power in Edinburgh after almost 20 years.

The SNP had a spring in their step during this campaign after a chaotic couple of years.

First Minister and SNP leader John Swinney had apparently stemmed the bleeding after the infamous police fraud investigation, endless fallout over gender identity reforms, and last year’s general election where they were almost wiped out.

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This result leaves them no further forward than 12 months ago with questions over the party’s strategy.

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SNP and Reform UK election billboard posters in Larkhall, Lanarkshire, on the last day of campaigning for the Hamilton, Larkhall and Stoneho
Image:
SNP and Reform UK election billboard posters in Larkhall. Pic: PA

Reform UK is very much in the Scottish picture now, finishing a few hundred votes behind the nationalists.

This is a party led by a man who barely registered any support north of the border for many years. A remarkable transformation.

The surge in support has spooked many because they know fine well Nigel Farage is only just getting started.

One poll had Reform UK forming the next official opposition at Holyrood. After tonight, that might be a tall order but Mr Farage is shaking things up at the expense of the Conservatives.

The unpredictable nature of this contest may give us a taste of what is to come.

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UK

EuroMillions: Single ticket-holder could win UK’s biggest lottery prize tonight

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EuroMillions: Single ticket-holder could win UK's biggest lottery prize tonight

A single ticket-holder could win the biggest lottery prize the UK has ever seen if they match the right numbers in tonight’s EuroMillions draw.

The jackpot has rolled over to an estimated £208m, after Tuesday’s £199m draw – which also would have been a record-breaking amount – had no winners.

The winner would instantly become richer than Adele and Harry Styles, while also bagging the top spot on the National Lottery’s biggest wins list.

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Andy Carter, senior winners’ adviser at Allwyn, said: “We are now on the verge of potentially creating the biggest National Lottery winner this country has ever seen.”

The previous largest prize pot was won by an anonymous UK ticket-holder, who took home £195m on 19 July 2022.

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Just two months earlier, Joe and Jess Thwaite, from Gloucester, won £184,262,899 with a Lucky Dip ticket. At the time, Joe was a communications sales engineer, and Jess ran a hairdressing salon with her sister.

Mr Thwaite said he woke up at 5am as usual, and checked his phone to see an email saying, “Good news, you have won a prize”.

But he did not immediately wake his wife, choosing to let her sleep in.

“I saw how much and I didn’t know what to do,” Mr Thwaite said.

“I couldn’t go back to sleep, I didn’t want to wake Jess up, so I just laid there for what seemed like forever. I spent some time searching for property with no budget limit, which was a novelty!”

When his wife woke up, she assumed the National Lottery app was wrong.

Read more:
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Winner ‘thought it was a scam’

In February last year, Richard and Debbie Nuttall were revealed as the UK winners of a £61m EuroMillions jackpot – who at first thought they had only won £2.60.

The couple from Lancashire split the £123m prize with a winner in Spain.

This year’s biggest prize, of £83m went to a UK winner in January.

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Science

Japanese Private Lunar Lander Resilience Fails Mission, Crashes on Moon

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Japanese Private Lunar Lander Resilience Fails Mission, Crashes on Moon

A Japanese spacecraft attempting to achieve the country’s first private moon landing instead crashed on the lunar surface, according to mission officials. The Resilience lander, developed by Tokyo-based ispace, lost communication one minute and 45 seconds before its scheduled soft touchdown on June 5 at 3:17 p.m. EDT. The descent was targeted for the Mare Frigoris region on the Moon’s near side. ispace had its second problem on the moon when its laser rangefinder broke, which is a big improvement over its prior failure in April 2023.

Japan’s Resilience Lunar Lander Crashes in Hard Landing, ispace Vows to Learn and Rebuild

As per an official statement from ispace, telemetry from Resilience revealed that the rangefinder’s delayed data caused a failure in adjusting landing speed. This likely led to a “hard landing”, suggesting the spacecraft hit the moon’s surface too fast to survive or complete its mission. The lander, carrying five payloads, such as a Tenacious rover and scientific instruments, crashed with no survivors. The firm’s CEO, Takeshi Hakamada, apologised and remarked that the company would use the mission to learn about future missions.

The Hakuto-R Mission 2 team launched a 7.5-foot-tall, 2,200-pound Resilience lander into space aboard a SpaceX Falcon 9 rocket in early May. But with a perfect orbit, the lander smashed into the lunar surface at 192 metres – an echo of Mission 1’s mission failure in 2023, which crashed because a fault in one of its altitude sensors was not corrected.

The Resilience crash adds to private attempts to explore the moon, including the unsuccessful Beresheet and Peregrine missions. Crewed landings such as Odysseus and Blue Ghost prove that dreams of commercial space are possible. The second Hakuto-R mission was a private attempt and a blow to Japan’s space ambitions. Failure has not stopped ispace development for Mission 3 and Mission 4 with its larger Apex 1.0 lander.

Hakamada mentioned that the priority for the team was now to find out what caused the crash. “Supporters are disappointed,” CFO Nozaki says, “but ispace has yet to cover the moon, and the road does not end, even if Mission 2 didn’t go as planned.”

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