Redditors Became Instant Millionaires As Company's Stock Soars 48% During Stock Exchange Debut

By Thea Felicity

Mar 24, 2024 10:27 AM EDT

NEW YORK, NEW YORK - MARCH 21: Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City. The social media platform Reddit had priced its IPO in the range of $31 to $34 per share on Wednesday.
(Photo : Photo by Spencer Platt/Getty Images)

On Thursday (Mar. 21), a group of Reddit power users saw huge profits as the social messaging company Reddit Inc. debuted on the New York Stock Exchange, surging 48% on its first day of trading, according to CNBC.

While some Redditors initially expressed hesitancy toward the initial public offering (IPO) due to concerns about the company's business model and its relationship with moderators, Chief Financial Officer Drew Vollero disclosed that tens of thousands of users ultimately participated in purchasing shares. 

Through Reddit's directed-share program (DSP), a model utilized by companies like Airbnb and Rivian, select Redditors, along with company insiders and affiliates, gained access to the IPO. Shares are distributed based on a user's reputation, as measured by Reddit's karma system. 

READ NEXT: Reddit Sets IPO Price at $34 Per Share for $6.4 Billion Valuation Ahead of Its Public Debut on New York Stock Exchange

Notably, participants in Reddit's DSP were not subject to a lockup period, enabling immediate selling of shares following the IPO, unlike company insiders who typically face a waiting period. Consequently, some Redditors, including one with the username LearnedButt, boasted profits of thousands of dollars shortly after selling their shares. 

Despite varying outcomes, Reddit users expressed a range of emotions, from excitement over unexpected gains to regret over missed opportunities. Additionally, some Redditors, like follysurfer, expressed intentions to hold onto their shares for the long term. 

Regardless, all Reddit shareholders envision a potentially successful investment journey with the platform now that it's public. 

"It will absolutely plummet tomorrow," a Wallstreetbets commenter said. 

It's worth mentioning that Redditors collectively gained millions of dollars in profits after Reddit's stock surged on its first day of trading. However, the exact average total amount gained by each was not specified. VCPost recently reported that a $6.4 billion valuation was estimated ahead of Reddit's debut.

READ MORE: Reddit IPO: Social Media Platform Seeking $748 Million in Highly Anticipated Stock Launch

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