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Tag: Reddit Inc

  • Reddit (RDDT) Soars 12% on Bargain-Hunting, Key Execs Dispose of Shares

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    We recently published 10 Stocks Boasting 10-42% Gains. Reddit Inc. (NYSE:RDDT) is one of the best-performing stocks on Tuesday.

    Reddit extended its rally to a third consecutive day on Tuesday, jumping 12.04 percent to close at $218.48 apiece as investors resorted to bargain-hunting following last week’s disposition of shares by none other than its key executives.

    In separate regulatory filings last week, Reddit Inc. (NYSE:RDDT) said its president and CEO, Steve Huffman; Chief Finance Officer Andrew Vollero; Chief Accounting Officer Michelle Marie Reynolds; Chief Legal Officer Benjamin Seong Lee; Chief Operating Officer Jennifer Wong; and Chief Technology Officer Christopher Brian Slowe, all disposed significant shares in the company.

    Reddit (RDDT) Soars 12% on Bargain-Hunting, Key Execs Dispose of Shares

    Photo by Mohamed Hadji on Unsplash

    Huffman alone sold $7.56 million worth of shares, while Vollero disposed of $3.69 million.

    Reynolds booked $1.17 million, Lee sold $3 million, Wong disposed of $19 million, and Slowe booked $7.4 million.

    In other recent news, Reddit Inc. (NYSE:RDDT) saw its net income expand by 443 percent to $163 million from $30 million in the same period last year. Revenues jumped by 68 percent to $585 million from $348 million year-on-year, on the back of a 74 percent jump in advertising revenues at $549 million, and other revenues, which increased by 7 percent to $36 million.

    Looking ahead, Reddit Inc. (NYSE:RDDT) is targeting revenues for the fourth quarter at a range of $655 million and $665 million.

    While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

    READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

    Disclosure: None. This article is originally published at Insider Monkey.

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  • Here’s what Morgan Stanley, Wells Fargo stand to gain from lower interest rates

    Here’s what Morgan Stanley, Wells Fargo stand to gain from lower interest rates

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    Federal Reserve Bank Chair Jerome Powell announces that interest rates will remain unchanged during a news conference at the bank’s William McChesney Martin building on May 01, 2024 in Washington, DC. 

    Chip Somodevilla | Getty Images

    Big Wall Street banks and interest rates have a complicated relationship.

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  • Reddit soars after announcing OpenAI deal that allows use of its data for training AI models

    Reddit soars after announcing OpenAI deal that allows use of its data for training AI models

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    The trading floor of the New York Stock Exchange prepares for the social media platform Reddit’s initial public offering in New York City on March 21, 2024.

    Spencer Platt | Getty Images

    Reddit shares surged 11% in extended trading on Thursday after the social media company announced a partnership with OpenAI that will allow the ChatGPT maker to train its artificial intelligence models on Reddit content.

    As part of the deal, OpenAI will gain access to Reddit’s Data application programming interface, or API, “which provides real-time, structured, and unique content from Reddit,” according to a release.

    In exchange, Reddit will begin offering certain AI features to users and moderators, powered by OpenAI, which will also become a Reddit advertising partner. Google announced a similar partnership with Reddit in February, allowing the company to train its AI models, such as Gemini, on Reddit content via access to the platform’s API.

    “Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up to date human conversations about anything and everything,” CEO Steve Huffman said in Thursday’s release. “Including it in ChatGPT upholds our belief in a connected internet, helps people find more or what they’re looking for, and helps new audiences find community on Reddit.”

    OpenAI CEO Sam Altman is a former board member and major shareholder in Reddit, with a stake valued at about $750 million after Thursday’s pop. OpenAI Chief Operating Officer Brad Lightcap spearheaded the deal, which was approved by the company’s board, the release said.

    Earlier this week, OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface, the company’s latest effort to expand use of its popular chatbot. The update brings GPT-4 to everyone, including OpenAI’s free users, Chief Technology Officer Mira Murati said Monday in a livestreamed event.

    Murati said the new model, GPT-4o, is “much faster,” with improved capabilities in text, video and audio. OpenAI said it eventually plans to allow users to video chat with ChatGPT.

    For Reddit, the deal provides another spark following a rally on Monday and Tuesday tied to a broader surge in so-called meme stocks such as GameStop. Reddit, which went public in March and reached a record close a few days after its initial public offering, is back to trading near its high of $65.11.

    WATCH: OpenAI co-founder and chief scientist leaving company

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  • GameStop soars 60% as ‘Roaring Kitty’, who drove meme craze, resurfaces

    GameStop soars 60% as ‘Roaring Kitty’, who drove meme craze, resurfaces

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    GameStop shares rallied dramatically on Monday after “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, posted online for the first time in roughly three years.

    The post, a picture on X of a video gamer leaning forward on their chair as if to indicate he’s taking the game seriously, marked Roaring Kitty’s first post on the platform — or on Reddit— since 2021. The post has garnered 63,000 likes in 13 hours.

    GameStop last traded up 70% after soaring as much as 110%. Trading in GameStop was halted multiple times due to volatility. AMC, another meme stock, jumped 22% Monday, while Reddit traded 13% higher.

    Roaring Kitty, whose legal name is Keith Gill, is a former marketer for Massachusetts Mutual Life Insurance. Also known as DeepF——Value on Reddit, Gill drew an army of day traders who cheered each other on and piled into the brick-and-mortar video game stock, and GameStop call options, between 2020 and 2021.

    The “meme stock” frenzy involved individual investors taking aim at short sellers and hedge funds who were pessimistic about the outlook for GameStop and other companies, forcing them to cover their short positions and drive up the price of the target stocks. Currently, the short position in GameStop shares amounts to more than 24% of all its shares that are freely available to trade, also known as the float.

    Gill later posted a few videos with scenes from popular TV shows and movies, but there’s no clear indication of what they mean.

    GameStop was the most talked about stock on Reddit’s WallStreetBets by far on Monday, with more than 600 mentions in the last 24 hours, surpassing the popular chipmaker Nvidia, according to market research platform Quiver Quantitative. 

    The poster child was hedge fund Melvin Capital, which was heavily shorting GameStop and became a target of the army of amateur traders, suffering huge losses that prompted Ken Griffin’s Citadel, as well as Point72, to backstop Melvin’s finances with close to $3 billion in support.

    Short selling is a strategy in which investors borrow shares of a stock at a certain price in expectations that the market value will fall below that level when it’s time to pay for the borrowed shares.

    The GameStop mania that drove its stock above $120 a share, split-adjusted, in early 2021 from as little as $3 in the space of three months, forced brokerages including Robinhood to limit trading in heavily shorted stocks. In response, one Robinhood user filed a class-action lawsuit after the app’s decision to restrict GameStop trading on its platform. The suit was dismissed in August 2023.

    Another class-action lawsuit brought against Gill alleged he pretended to be a novice trader despite being a licensed professional.

    The volatility spawned a series of congressional hearings around brokers’ practices and gamifying retail trading, and testimony from leaders of Robinhood, Melvin Capital, Reddit and Citadel, as well as Gill. The entire episode finally inspired the 2023 movie “Dumb Money,” in which Paul Dano played Gill.

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    In January 2021, GameStop shares hit an all-time high of $120.75 intraday, adjusted for a subsequent 4-for-1 stock split in the summer of 2022. But as interest from individual investors eventually faded, the stock collapsed along with other meme stocks such as AMC Entertainment Holdings. GameStop last month hit a three-year low of $9.95.

    Recently, the stock has started to move higher, which may have rekindled Gill’s interest, along with the enormous amount of short interest in the name. GameStop has soared 57% so far in May, closing Friday at $17.46.

    But the fundamental business at GameStop, evidenced by its most recent earnings report, shows a discouraging picture at the video game company. In late March, GameStop said it had cut an unspecified number of jobs to reduce costs, and reported lower fourth-quarter revenue amid rising competition from e-commerce-based competitors.

    GameStop posted revenue of $1.79 billion for the fiscal fourth quarter, compared with $2.23 billion in the same quarter a year earlier.

    Read more CNBC GameStop news

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  • Eight newspaper publishers sue Microsoft and OpenAI over copyright infringement

    Eight newspaper publishers sue Microsoft and OpenAI over copyright infringement

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    Sam Altman, CEO of OpenAI, during a panel session at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024.

    Stefan Wermuth | Bloomberg | Getty Images

    Eight U.S. newspaper publishers filed suit against Microsoft and OpenAI in a New York federal court on Tuesday, claiming the technology companies reuse their articles without permission in generative artificial intelligence products and incorrectly attribute inaccurate information to them.

    The legal challenge comes four months after The New York Times sued OpenAI over copyright infringement in the ChatGPT chatbot that the startup released in late 2022. OpenAI said in a January blog post that the case is without merit, adding it wants to support “a healthy news ecosystem.” Sam Altman, OpenAI’s CEO, said in January that the startup had wanted to pay The New York Times and was surprised to learn about the lawsuit.

    In recent months, OpenAI has signed deals with a handful of media companies, including Axel Springer and The Financial Times, enabling the Microsoft-backed startup to draw on the publishers’ content in order to improve AI models. Google, which has its own general-purpose chatbot for responding to user queries, said in February that it had reached an agreement with Reddit that includes the right to train AI models on the platform’s content.

    The group of eight newspaper publishers takes issue with ChatGPT and Microsoft’s Copilot assistant — available in the Windows operating system, the Bing search engine and other products the software maker produces — for “purloining millions of the publishers’ copyrighted articles without permission and without payment,” according to the complaint.

    Microsoft and OpenAI representatives did not immediately respond to requests for comment. The newspaper publishers in the lawsuit operate The New York Daily News, The Chicago Tribune, The Orlando Sentinel, The Sun-Sentinel of Florida, The Mercury News of California, The Denver Post, The Orange County Register in California and The Pioneer Press of Minnesota.

    They said OpenAI has drawn on data sets containing text from their newspapers to train its GPT-2 and GPT-3 large language models, which can spit out text in response to a few words of human input.

    “The current GPT-4 LLM will output near-verbatim copies of significant portions of the publishers’ works when prompted to do so,” the complaint said, showing several examples of ChatGPT and the Copilot allegedly doing so.

    The publishers said Microsoft copies information from their newspapers for the Bing search index, which helps to inform answers in the Copilot. But such output doesn’t always provide links to newspaper websites, where they can view ads alongside articles or pay for subscriptions.

    The New York Times case also touched on the matter of OpenAI models regurgitating information from its articles. In its blog post, OpenAI characterized such behavior “a rare failure of the learning process that we are continually making progress on.”

    WATCH: OpenAI CEO Sam Altman: The U.S. needs an AI policy

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  • Wells Fargo kicks off our bank earnings Friday. Rate cuts and dealmaking will be in focus this season

    Wells Fargo kicks off our bank earnings Friday. Rate cuts and dealmaking will be in focus this season

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    A woman walks past Wells Fargo bank in New York City, U.S., March 17, 2020.

    Jeenah Moon | Reuters

    What a difference a year makes.

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  • Redditors bank millions of dollars as a group on stock’s opening day

    Redditors bank millions of dollars as a group on stock’s opening day

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    Reddit power users who participated in the company’s IPO made millions of dollars as a group in profits after the stock’s big jump in its first day on the market.

    While Redditors interviewed by CNBC ahead of the offering said they were skipping out on the IPO due to concerns about the business and the company’s often fraught relationship with moderators, Chief Financial Officer Drew Vollero told Axios that tens of thousands of users ended up purchasing shares.

    The stock jumped 48% in its debut on Thursday, closing at $50.44, up from the $34 offer price.

    Certain Redditors — along with company insiders and their friends and family members — were able to join the initial public offering through the company’s directed-shared program, or DSP. It’s a model that was used by companies like Airbnb, Rivian and Doximity to reward their loyal users and customers.

    Of the 22 million shares that Reddit and existing stakeholders sold in the offering, some 1.76 million were made available through the DSP, equal to 8% of the deal. The shares were offered based on a user’s reputation, measured through what the company calls karma.

    Because Reddit’s DSP doesn’t have a lockup period, participants could immediately sell shares, unlike company insiders and early investors, who have to wait about 180 days. The stock shot up as high as $57.80 shortly after the IPO, and some users said they sold after the early rally.

    One Redditor with the username LearnedButt claimed on the r/RedditIPO forum to have made a profit of $20,000 after the initial pop. The user said they sold the stock at $54 a share.

    “Even if it goes to 100/share, I’m cool and feel not an ounce of FOMO,” LearnedButt wrote, using the acronym for fear of missing out. “This is 20K I didn’t have an hour ago.”

    In a reply to LearnedButt, Reddit user friskevision wrote, “Although I didn’t invest as much as you, I did make a quick $1,500. Reddit finally pays me back for those years of using it. :)”

    Meanwhile, the user blackberrydoughnuts expressed regret for selling too late after the shares dropped below $50.

    “I sold my 1000 shares at $48 and I’m sad I didn’t sell earlier when it was at $54!” blackberrydoughnuts wrote. “I really should have!”

    Redditors used E-Trade to purchase shares via the DSP, which was only available to U.S. residents.

    Reddit user Reepicheepee made a small investment in the shares.

     “Just sold 15 at $50,” Reepicheepee said. “I saw the price dropping and decided to cash in. Small net of $250, though! I’ll continue watching the price throughout the day to see if I made the right call …”

    Though some Redditors were out to make a quick buck, others like follysurfer plan on becoming long-term Reddit shareholders.

    “Got 20 shares,” follysurfer wrote. “Guess I’ll hold them for 20yrs and see what happens.”

    Stock chatter on Reddit is a familiar subject and one of the reasons the site is so well known.

    The Wallstreetbets subreddit also became known known for its role in helping spawn the 2021 meme stock boom and the meteoric rise of stocks like GameStop and AMC Entertainment.

    Reddit CEO Steve Huffman acknowledged the importance of Wallstreetbets in an interview with CNBC on Thursday, brushing aside concerns that the vocal community could cause any problems on Reddit’s first day of trading.

    “That’s the beautiful thing about Reddit, is that they tell it like it is,” Huffman said. “But you have to remember they’re doing that on Reddit. It’s a platform they love, it’s their home on the internet.”

    Redditor erjo5055 said in the Wallstreetbets forum, “Guess using this site for nearly 10 years has finally paid off. I’m sad I didn’t buy more shares, was going to buy 2x as many.”

    The Reddit user Galactic responded, “High-5, fellow DSP dumper,” adding, “Never thought this site would make me money, but here we are!”

    One commenter on Wallstreetbets, PatrickBateman-AP, had a word of caution for anyone who hasn’t yet sold.

    “It will absolutely plummet tomorrow,” PatrickBateman-AP wrote.

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  • Reddit pops as much as 70% in NYSE debut after selling shares at top of range

    Reddit pops as much as 70% in NYSE debut after selling shares at top of range

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    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 that price, the company had a market cap of about $10.9 billion. Reddit shares then dropped to $48.64 roughly a half 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 surge 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.

    Reddit’s annual sales for 2023 rose 20% to $804 million from $666.7 million a year earlier, the company detailed in its prospectus. The company recorded a net loss of $90.8 million last year, narrower than its loss of $158.6 million in 2022.

    Based on its revenue over the past four quarters, Reddit’s market cap at IPO gave it a price-to-sales ratio of about 8. Alphabet trades for 6.1 times revenue, Meta has a multiple of 9.7, Pinterest’s sits at 7.5 and Snap trades for 3.9 times sales, according to FactSet.

    In addition to those companies, Reddit also counts X, Discord, Wikipedia and Amazon’s Twitch streaming service as competitors in its prospectus.

    Reddit is betting that data licensing could become a major source of revenue, and said in its filing that it’s entered “certain data licensing arrangements with an aggregate contract value of $203.0 million and terms ranging from two to three years.” This year, Reddit said it plans to recognize roughly $66.4 million in revenue as part of its data licensing deals.

    Google has also entered into an expanded partnership with Reddit, allowing the search giant to obtain more access to Reddit data to train AI models and improve its products.

    Reddit revealed on March 15 that the Federal Trade Commission is conducting a nonpublic inquiry “focused on our sale, licensing, or sharing of user-generated content with third parties to train AI models.” Reddit said it was “not surprised that the FTC has expressed interest” in the company’s data licensing practices related to AI, and that it doesn’t believe that it has “engaged in any unfair or deceptive trade practice.”

    Reddit was founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, the company’s CEO. Existing stakeholders, including Huffman, sold a combined 6.7 million shares in the IPO.

    As part of the IPO, Reddit gave some of its top moderators and users, known as Redditors, a chance to buy stock through a directed-share program. Companies like Airbnb, Doximity and Rivian have used similar programs to reward their power users and customers.

    “I hope they believe in Reddit and support Reddit,” Huffman told CNBC in an interview on Thursday. “But the goal is just to get them in the deal. Just like any professional investor.”

    Redditors have expressed skepticism about the IPO, both because of the company’s financials and its often troubled relationship with moderators. Huffman said he recognizes that reality and acknowledged the controversial subreddit Wallstreetbets, which helped spawn the surge in meme stocks like GameStop.

    “That’s the beautiful thing about Reddit, is that they tell it like it is,” Huffman said. “But you have to remember they’re doing that on Reddit. It’s a platform they love, it’s their home on the internet.”

    OpenAI CEO Sam Altman is one of Reddit’s major shareholders along with Tencent and Advance Magazine Publishers, the parent company of publishing giant Condé Nast. Altman’s stake in the company was worth over $400 million before the stock began trading. Altman led a $50 million funding round into Reddit in 2014 and was a member of its board from 2015 through 2022.

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  • Reddit Is Killing The Best Way To Read The Site

    Reddit Is Killing The Best Way To Read The Site

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    Reddit is one of the biggest and most important websites on the planet, especially since it’s one of the last places human beings can get questions answered by actual human beings. So it sucks to see that the company is about to crush many of the best ways to actually experience the whole thing.

    The Week In Games: System Shock, Street Fighter 6, And More

    For anyone using the site on a desktop computer the Reddit experience is fine, I guess (“Old Reddit” is better), but on phones, that all changes. Reddit’s official app sucks, and is absolutely loaded with intrusive ads, meaning a lot of people rely on the work of third-party apps—like the incredibly popular Apollo on iOS and my own favourite, Infinity on Android—to browse and comment.

    Or they did. Those third-party apps only existed because Reddit allowed them to access their API (essentially their backend); today, the site announced specific changes to that arrangement (first broadly announced last month), implementing charges for the data—similar to those introduced by another platform with popular third-party apps, Twitter—that are so astronomical they’re going to price every third-party app out of the market.

    The creator of Apollo has done the math, and says:

    I’ll cut to the chase: 50 million requests costs $12,000, a figure far more than I ever could have imagined.

    Apollo made 7 billion requests last month, which would put it at about 1.7 million dollars per month, or 20 million US dollars per year. Even if I only kept subscription users, the average Apollo user uses 344 requests per day, which would cost $2.50 per month, which is over double what the subscription currently costs, so I’d be in the red every month.

    Meanwhile one of the developers of RIF, another popular Android app, say that not only are they also being priced out (if Apollo can’t afford it nobody can), but that Reddit is also implementing a change where third-party apps would lose access to NSFW subreddits, while the official site would not:

    Removal of sexually explicit material from third-party apps while keeping said content in the official app. Some people have speculated that NSFW is going to leave Reddit entirely, but then why would Reddit Inc have recently expanded NSFW upload support on their desktop site?

    It’s obvious that the steep pricing, which goes far beyond what these developers were expecting or could ever afford, is not there to make money. Not when it was clear nobody was ever going to be able to pay it. It’s being brought in to crush third-party alternatives, driving every mobile user to the official app where they’ll either have to watch ads or pay for Reddit Premium.

    Or, you know, stop going to Reddit.

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    Luke Plunkett

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