Reddit investors shrug off hold rating, bid up stock another 15% as post-IPO rally continues

Published

2 years ago

March 26, 2024

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Reddit’s post-IPO rally continues, despite the company receiving a hold rating from a prominent analyst.

Reddit shares were up by 15% during midday trading on Tuesday to around $68.88, underscoring investor interest in the company, which was the first major social media business to go public since Pinterest’s 2019 IPO. The company’s shares were up about 30% on Monday during end-of-day trading, kicking off Reddit’s first week as a publicly traded business following last week’s IPO, in which it raised about $750 million.

Some 34.9 million Reddit shares changed hands on Tuesday, the most since 48.7 millions shares were traded on the company’s opening day on the market. Reddit and existing shareholders sold a total of 22 million shares in the IPO.

Investors continue to rally behind Reddit despite New Street Research issuing a neutral rating on the company “after the stock goes to the moon,” analysts wrote in a note that was published Tuesday.

Analysts at New Street Research, which was the first analyst firm to issue a stock rating on Reddit, said that they wouldn’t change their $54 price target, and that they expect “volatility into the first earnings report (date still TBD, we assume early May) and three days after when the lockup expires,” referring to the 180-day period that certain Reddit shareholders are prohibited from selling their shares.

New Street analysts wrote that “an OpenAI data licensing win is baked into the stock,” implying that investors believe that Reddit will financially benefit if it inks a data-licensing deal with the ChatGPT maker. Investors expect such a deal “to be added soon,” considering OpenAI CEO Sam Altman maintains a 9% stake in Reddit.

Altman was a Reddit investor, a former board member and one of its biggest shareholders, along with Chinese tech giant Tencent and Advance Magazine Publishers, the parent company of publishing giant Condé Nast. His stake in Reddit increased by $200 million to about $613 million following the company’s IPO.

New Street analysts explained that the upside case for Reddit’s data licensing business hinges on the current boom in generative artificial intelligence, driven by large language models and related models that power software like ChatGPT’s text-generation software and Google’s Gemini image-generation tool. Although Reddit’s core business is online advertising, it has pointed to data licensing as a potential big revenue source. It also recently entered into an expanded partnership with Google, allowing the search giant to access more Reddit data to train its AI models.

However, New Street analysts noted that the Federal Trade Commission is conducting an inquiry into Reddit’s data licensing business, which Reddit revealed earlier in March in a corporate filing, saying that it was “not surprised that the FTC has expressed interest” and that it does “not believe that we have engaged in any unfair or deceptive trade practice.”

“At first blush, it seems relatively benign, but it could be an overhang,” the New Street analysts wrote, noting that the “FTC inquiry could slow the pace of new deal signings and will certainly require attention and time dedicated to addressing the inquiry (i.e., opportunity cost for RDDT’s legal team).”

Meanwhile, some Reddit users took to the company’s various finance-related subreddits on Tuesday to discuss the company’s rising shares since its IPO. Several of these users, along with certain company employees and their family members, were part of Reddit’s directed-share program and not subject to a lockup period, thus allowing them to collectively make millions of dollars in profits the day that Reddit went public on the New York Stock Exchange.

One Reddit user with the username “bkarp00” wrote about the Reddit rally, “Looks like all the quick cash IPO people out are helping it rally today with less people willing to sell at these levels,” referring to shareholders who believe that Reddit’s stock will continue to increase in value.

Another Reddit user with the username “memory–” agreed, explaining, “if facebook’s users are worth $30B a quarter year and most of them dont reddit and most redditors don’t facebook, how much is reddit undervalued?”

User “IrishRun” wrote, “I’ve been kicking myself for not buying more shares, but there was no guarantee I would have received the requested number and then I would probably still be wishing I’d bought more.”

Meanwhile, inside Reddit’s infamous r/WallStreetBets subreddit, known for popularizing so-called meme stocks like GameStop, many members were ignoring the Reddit rally in favor of pontificating on the Nasdaq debut of Trump Media & Technology Group, during which shares rose about 50% on Tuesday morning.

Watch: Cramer’s Mad Dash Reddit

Technology

SpaceX aims for $800 billion valuation in secondary share sale, WSJ reports

Published

5 hours ago

December 6, 2025

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SpaceX aims for 0 billion valuation in secondary share sale, WSJ reports

Dado Ruvic | Reuters

Elon Musk’s SpaceX, is initiating a secondary share sale that would give the company a valuation of up to $800 billion, The Wall Street Journal reported Friday.

SpaceX is also telling some investors it will consider going public possibly around the end of next year, the report said.

At the elevated price, Musk’s aerospace and defense contractor would be valued above ChatGPT maker OpenAI, which wrapped up a share sale at a $500 billion valuation in October.

SpaceX has been investing heavily in reusable rockets, launch facilities and satellites, while competing for government contracts with newer space players, including Jeff Bezos‘ Blue Origin. SpaceX is far ahead, and operates the world’s largest network of satellites in low earth orbit through Starlink, which powers satellite internet services under the same brand name.

A SpaceX IPO would include its Starlink business, which the company previously considered spinning out.

Musk recently discussed whether SpaceX would go public during Tesla‘s annual shareholders meeting last month. Musk, who is the CEO of both companies, said he doesn’t love running publicly traded businesses, in part because they draw “spurious lawsuits,” and can “make it very difficult to operate effectively.”

However, Musk said during the meeting that he wanted to “try to figure out some way for Tesla shareholders to participate in SpaceX,” adding, “maybe at some point, SpaceX should become a public company despite all the downsides.”

WATCH: What retail investors should know about OpenAI and SpaceX

Technology

Judge finalizes remedies in Google antitrust case

Published

6 hours ago

December 5, 2025

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Judge finalizes remedies in Google antitrust case

The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021.

Andrew Kelly | Reuters

A U.S. judge on Friday finalized his decision for the consequences Google will face for its search monopoly ruling, adding new details to the decided remedies.

Last year, Google was found to hold an illegal monopoly in its core market of internet search, and in September, U.S. District Judge Amit Mehta ruled against the most severe consequences that were proposed by the Department of Justice.

That included the proposal of a forced sale of Google’s Chrome browser, which provides data that helps the company’s advertising business deliver targeted ads. Alphabet shares popped 8% in extended trading as investors celebrated what they viewed as minimal consequences from a historic defeat last year in the landmark antitrust case.

Investors largely shrugged off the ruling as non-impactful to Google. However some told CNBC it’s still a bite that could “sting.”

Mehta on Friday issued additional details for his ruling in new filings.

“The age-old saying ‘the devil is in the details’ may not have been devised with the drafting of an antitrust remedies judgment in mind, but it sure does fit,” Mehta wrote in one of the Friday filings.

Google did not immediately respond to a request for comment. The company has previously said it will appeal the remedies.

In August 2024, Mehta ruled that Google violated Section 2 of the Sherman Act and held a monopoly in search and related advertising. The antitrust trial started in September 2023.

In his September decision, Mehta said the company would be able to make payments to preload products, but it could not have exclusive contracts that condition payments or licensing. Google was also ordered to loosen its hold on search data. Mehta in September also ruled that Google would have to make available certain search index data and user interaction data, though “not ads data.”

The DOJ had asked Google to stop the practice of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.

The judge’s September ruling didn’t end the practice entirely — Mehta ruled out that Google couldn’t enter into exclusive deals, which was a win for the company. Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.

Mehta’s new details

In the Friday filings, Mehta wrote that Google cannot enter into any deal like the one it’s had with Apple “unless the agreement terminates no more than one year after the date it is entered.”

This includes deals involving generative artificial intelligence products, including any “application, software, service, feature, tool, functionality, or product” that involve or use genAI or large-language models, Mehta wrote.

GenAI “plays a significant role in these remedies,” Mehta wrote.

The judge also reiterated the web index data it will require Google to share with certain competitors.

Google has to share some of the raw search interaction data it uses to train its ranking and AI systems, but it does not have to share the actual algorithms — just the data that feeds them.” In September, Mehta said those data sets represent a “small fraction” of Google’s overall traffic, but argued the company’s models are trained on data that contributed to Google’s edge over competitors.

The company must make this data available to qualified competitors at least twice, one of the Friday filing states. Google must share that data in a “syndication license” model whose term will be five years from the date the license is signed, the filing states.

Mehta on Friday also included requirements on the makeup of a technical committee that will determine the firms Google must share its data with.

Committee “members shall be experts in some combination of software engineering, information retrieval, artificial intelligence, economics, behavioral science, and data privacy and data security,” the filing states.

The judge went on to say that no committee member can have a conflict of interest, such as having worked for Google or any of its competitors in the six months prior to or one year after serving in the role.

Google is also required to appoint an internal compliance officer that will be responsible “for administering Google’s antitrust compliance program and helping to ensure compliance with this Final Judgment,” per one of the filings. The company must also appoint a senior business executive “whom Google shall make available to update the Court on Google’s compliance at regular status conferences or as otherwise ordered.”

This is breaking news. Check back for updates.