Reddit's Rocky IPO Journey - Analysts Cast Doubt Amid 'Meme Stock' Fears
Portfolio Pulse from Anusuya Lahiri
Reddit Inc (NYSE:RDDT) has faced skepticism post-IPO, with concerns about its profitability and 'meme stock' status. Despite not having reported an annual profit since its 2005 inception, its IPO was notable, with shares initially offered at $34. The stock has since dropped, trading at $45.88, below the initial $47 offering price. Analysts from Bernstein and Baird issued 'Underperform' and 'Neutral' ratings, respectively, with concerns over engagement metrics and content, but also noting Reddit's strong user community and potential for growth. The stock has lost over 9.2% since its IPO.
April 05, 2024 | 1:24 pm
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Reddit Inc faces skepticism from analysts post-IPO, with concerns about profitability and becoming a 'meme stock'. The stock has dropped below its initial offering price, with a 9.2% loss since the IPO.
The skepticism from analysts, particularly the 'Underperform' rating from Bernstein and the 'Neutral' rating from Baird, combined with the stock's performance falling below its initial offering price, suggests a negative short-term impact on RDDT's stock price. The concerns over Reddit's profitability and the risk of becoming a 'meme stock' further contribute to the negative outlook.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100