--- title: "Reddit’s Stock Is Already Collapsing" description: "Reddit shares are cratering right now, plunging almost 25 percent in just two days, less than a week following its IPO." date: "2024-03-29" modified: "2024-03-29" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/the-byte/reddits-stock-already-collapsing" categories: - "Future Society" tags: - "ipo" - "reddit" - "the digest" --- # Reddit’s Stock Is Already Collapsing ![Reddit shares are cratering right now, plunging almost 25 percent in just two days, less than a week following its IPO.]() *\Image: Spencer Platt/Getty Images\* ## Boom and Bust It was only a matter of time. Reddit shares are cratering right now, plunging almost 25 percent in just two days, as [*CNBC* reports](). The social media company went public last week at an IPO price of $34, and initially rallied to around $65. This week, however, shares started slipping, following Hedgeye Risk Management [releasing a report]() calling the stock "grossly overvalued," and expecting it to fall around 50 percent, much closer to its original price. The drop — to about $49 by press time — highlights an expected course correction, in which initial investor enthusiasm was met by a reality check. Reddit has centered its IPO on AI, an attempt to cash in on the hype surrounding the tech. But in its 20-year history, the company has [yet to turn a profit](). In 2023, the platform lost a whopping $90.8 million. Meanwhile, the company's [much-loathed]() CEO Steve Huffman gifted himself an eyebrow-raising $193 million compensation package, which is [more than the CEOs of Meta, Pinterest, and Snap combined](). ## Unsubscribe In other words, Reddit's rocky start on Wall Street shouldn't come as much of a surprise. Without a clear path to profitability, with or without AI, the company isn't exactly likely to suddenly shake off its financially shaky past. To analysts, Reddit choosing the latter half of March was intentional, potentially foreshadowing weaker quarters to come. "The deal was oversubscribed, the float small, valuation range looked reasonable, and they timed the IPO coincident with easy comparisons where the company is going to post accelerating revenue and user growth the first quarter out of the gate as a public company," Hedgeye analyst Andrew Freedman wrote in the report. But the proof is in the pudding. Following this year's first quarter, all eyes will be on Reddit to see whether it can start implementing its plans to attract new users to the platform and drive up revenue. Was Reddit's initial bump following its IPO a finite burst of enthusiasm? Is this week's tumble a sign of what's still to come? The public offering was a bit of an outlier, following a [two-year-long drought]() in tech companies going public — and Reddit's future is as uncertain as ever. **More on Reddit:** *[Redditors Vent and Complain When People Mock Their "AI Art"]()* ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()