Chris Barber’s Post

[Daily Focus News] Big Tech "#Reddit shares jumped 48% in their debut on Thursday in the first initial public offering for a major social media company since Pinterest hit the market in 2019. The 19-year-old website that hosts millions of online forums priced its IPO on Wednesday at $34 a share, the top of the expected range. Reddit and selling shareholders raised about $750 million from the offering, with the company collecting about $519 million. The stock opened at $47 and reached a high of $57.80, marking a 70% increase at its peak for the day. It closed at $50.44, giving the company a market cap of about $9.5 billion." #reddit #ipo #initialpublicoffering #socialmedia #pinterest #shares #jump #kotra #kotrasvitc

Reddit shares rise 30% to start week after social media company’s IPO Reddit shares jumped 30% on Monday, as investors continued snapping up the stock following last week’s IPO. The shares, which debuted at $34 on Thursday, closed at $59.80. Reddit and existing investors raised roughly $750 million combined in the offering. Reddit shares soared 48% on their first day of trading on the New York Stock Exchange. Several moderators and users, known as Redditors, earn millions of dollars as a group. Along with their friends and family members, they were able to partake in Reddit’s IPO via a directed-share program, a model previously employed by Airbnb, Rivian and Doximity. OpenAI CEO Sam Altman, an early Reddit investor and former board member, saw his stake in the company grow from $200 million to over $613 million after the debut. Reddit’s IPO came the same week that data centre hardware vendor Astera Labs skyrocketed 72% on their opening day on the Nasdaq. Reddit was the first major social media company to go public since Pinterest’s offering in 2019, and investors were monitoring its performance to gauge whether the IPO market might pick up after a long lull due to rising interest rates and inflationary concerns starting in 2022. Plexo Capital founding managing partner and Reddit shareholder, Lo Toney, told CNBC that Reddit’s debut was “a positive sign not only for Reddit, but I think also the tech industry and what it might mean for future IPOs.” “One thing we know with certainty is that there [was] a lot of investor appetite during the roadshow for Reddit, and we see that it’s continuing to hold up well,” Toney said. “The market is signalling there’s an appetite for more companies to come to the public markets.” Still, Toney said other “dynamics need to happen,” including a few more companies entering the public market before it’s safe to say that the floodgates have opened. Toney noted that some startups have raised a lot of money so they may not be in any hurry to go public and raise more cash. “At the same time there are instances where the last private market financing may be higher than what the public market will accept as a public company valuation,” Toney said. Reddit had a private market valuation of $10 billion in 2021 when it last raised a funding round, according to deal-tracking service Pitchbook, and was valued at roughly $6.5 billion based on its IPO price of $34 per share. IQ Management Consultancy #news #trending #dailynews #technews #sharenews #viralnews #dailynewsupdates #viral #trendingnews

Reddit shares jumped as much as 70% in their debut on Thursday in the first initial public offering for a major social media company since Pinterest hit the market in 2019.The 19-year-old website that hosts millions of online forums priced its IPO on Wednesday at $34 a share, the top of the expected range. Reddit and selling shareholders raised about $750 million from the offering, with the company collecting about $519 million.The stock opened at $47 and reached a high of $57.80. At Thursday’s peak, the company had a market cap of about $10.9 billion. Reddit shares then dropped to $48.64 roughly half-an-hour after they began trading, giving the company a market cap of about $7.9 billion. Trading under the ticker symbol “RDDT,” Reddit is testing investor appetite for new tech stocks after an extended dry spell for IPOs. Since the peak of the technology boom in late 2021, hardly any venture-backed tech companies have gone public and those that have — like Instacart and Klaviyo last year — have underwhelmed. On Wednesday, data center hardware company Astera Labs made its public market debut on Nasdaq and saw its shares soar 72%, underscoring investor excitement over businesses tied to the boom in artificial intelligence. At its IPO price, Reddit was valued at about $6.5 billion, a haircut from the company’s private market valuation of $10 billion in 2021, which was a boom year for the tech industry. The mood changed in 2022, as rising interest rates and soaring inflation pushed investors out of high-risk assets. Startups responded by conducting layoffs, trimming their valuations and shifting their focus to profit over growth.Reported By CNBC

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Hurrah 🥂 for positive #IPO performance! But a big BOO! 🤬 for outsized first day pop and the bizarrely positive media reception it receives. This is your regular service announcement that IPO pop and enduring positive aftermarket performance are not correlated. In fact, data show that, for US IPOs, the first day of trading on average marks the high watermark in terms of performance and it’s downhill from there into the first lockup expiry at six months. This is NOT TRUE for UK/European IPOs as you can see here: https://lnkd.in/ebFVeyCi So who benefits from massive pop? (Apart from journalists, headline writers and Scott Galloway who proclaimed a new dawn for IPOs on the Pivot Podcast today: https://lnkd.in/et9ZwVgB). Primarily investors allocated stock in the IPO who decided to flip on the first day of trading and realize that gain. You should largely be targeting investors who will be allocated stock and hold it for at least the medium term. Neither the issuing company nor the shareholders selling in the offering at the IPO price capture this gain. Incumbent #privateequity / #venturecapital investors show a paper gain but this often evaporates before the lock up expires. As an example, in the Reddit, Inc. IPO, more than twice the offering size turned over in the first day of trading. Of course, the same share often changes hands multiple times but it clearly suggests that a lot of investors allocated stock in the IPO are no longer holders (or hold much less). By contrast the other big US IPO of the week, Astera Labs, churned about 0.85x of its offering size which suggests more stickiness - but of course it also had a big pop: 72% (it’s an AI driven story). The difference between the US and UK/Europe here is based on a number of factors - larger free floats in Europe mean less restricted supply, superior price discovery mechanisms in the IPO process allow for more accurate price range setting, more “hot” money chasing IPOs in the US (especially for a brand like Reddit). My colleague Rhiannon M. talked about some of these issues in a blog 3 weeks ago: https://lnkd.in/e4T_fc8m I hope that Reddit is trading comfortably above IPO price in 3 months time, but history suggests it will still be trading below the first day close. First day pop has been engineered as a feature of US IPOs, it should instead be called a bug. (This was the main complaint touted by the direct listing proponents lead by Bill Gurley of Benchmark - that mechanism has its place but a separate set of issues). As I’ve said before: having too much pop will make you vomit. 🤮 https://lnkd.in/etfQ5mRM

Are we due for another IPO boom in software? Taking a trip down memory lane here.. From 2014 to 2021, software-specific IPOs (not just general tech) were popping up like weeds in my neighbor’s unkempt lawn – 7 to 10 a year. By 2021, we were drowning in almost two dozen of them. But lately? It’s been deader than disco. We’re lucky if we get one a year. So, what’s the deal? Some folks are yammering that 2025 is gonna be the second coming, maybe even topping 2021. Why? Here’s the scoop: First off, we’ve got a ton of companies with over $500M in ARR and metrics tighter than my old jeans. The downturn gave them a good smack of financial discipline. No one’s impressed by your 100% growth if you’re setting money on fire. Now, a strong financial profile and high gross margins? That’s the new hotness. Free cash flow over 30%? Now we’re talking. Second, there’s this pent-up demand. Companies like CoreWeave and Anthropic are pulling in around a billion in revenue. They can keep cruising on private IPO financings, but Wall Street’s practically on its knees begging them to go public. Think Wiz and a whole army of other category winners north of $500M. But here’s what’s missing: deep tech and clean tech. Yeah, it’s a bummer, but those guys are nowhere to be found in the IPO pipeline. Also companies like Stripe are opting to stay private. Will be interesting to see if pivot and go for a massive raise and IPO once rates come down and their valuation goes over $100B+ And let’s not kid ourselves – a regime change in the US is on the horizon. Activist regulators like Lina Khan might be packing their bags soon, which means big M&A deals might finally get the green light. But hey, what do I know? I just read stuff on Twitter. Let’s see how this circus unfolds.

Had a great chat with Erin Griffith as she was getting this story together. She was intensely curious about the rapidly growing volume in private markets for startup stock. The article is a quick primer on the evolution of this explosive and, until recently, very secretive and opaque market. Covers the evolution of the pre-IPO market from the Facebook days, all the way up to the latest rollercoaster frenzy around Destiny (D/XYZ), and the role that marketplaces like Hiive are playing as alternative access point for the broader investment community. Ultimately, this story leads to many more questions: Should average retail investors have some form of access to this currently exclusive asset class? Are listed, closed-ended funds like DXYZ the right way for retail investors to access this market, or does its extreme volatility and apparently irrational price action pose a risk to those investors? Can market forces work out these problems as more supply comes to market via DXYZ and other closed-ended funds? Do unlisted open-ended funds like ARK Investment Management LLC's Ark Venture Fund which enable retail investors to buy-in at NAV instead of a floating public market price, albeit with significantly less liquidity, hold the key? Or, should regulators look at enabling other alternative options for small two-legged investors? #preipo #privatemarket #liquidity #unicorns

Any IPO is a major moment in time for a brand. But for Reddit, Inc., the upcoming IPO means so much more, to so many more. Predictions often say that what happens on 21 March is a litmus test. Not just for the value of challenger, loss-making, advertising-based social media companies, or even for their viability with investors. Instead, it’s a test for the IPO market itself. If done successfully — and if they are able to convince institutional investors there is tangible value in their model — this could be a turning point in a lackluster IPO landscape. But it comes with great risk, and not just for the stock price. The very future of the platform is potentially in question. Read what more Rich W. has to say about Reddit’s IPO via our blog post. https://lnkd.in/ewixk6rr

Super interesting analysis by Chris Mayo, CFA on the IPO performance of US based companies on first day VERSUS 3mo from IPO. (taking Reddit, Inc. as subject) I say UK and EU IPOs also tend to be so much closer to profitability and have real revenue VS US IPOs hence the drop in the 3-6mo term and then the race to profitability, cutting all costs (the true collateral, employees) and showing everything was put in place was just the perfect storm but with no signs of lightning ⚡️ purely engineered. Still brilliant/interesting dynamic. On the flip side EU IPOs (at least tech) are so much less and less “relevant” in the global scene? Idk man.. what’s value and what not?

For a long time, startup founders have considered an IPO a symbol of success. But what if the #IPO fails to bring the desired results? In a compelling letter featured in the Financial Times, our client Mikhail Taver, from Taver Capital Partners, shares some reflections on it. Citing reasons such as liquidity restrictions and increased reporting requirements, Taver argues that some founders might be better off exiting their venture through a traditional M&A deal. Read the full letter here: https://lnkd.in/dDabV6yX