Reddit Shares (NYSE:RDDT) Hit Wall Street, Up 48% On IPO, Down From The Open

The Reddit IPO was the final big name on our list to watch this week, and the launch of NYSE:RDDT did not disappoint. It was a day that started very strongly, with some of the initial excitement tapering off through the day and in to after hours and pre-markets sessions.

After reaching a high on the day of $57.80 first thing, RDDT share price currently stands at a mark of $49. Still healthily above the offering price of $34, but some 15% off the highs. From the open through to end of the normal session, Reddit shares were 6.2% in the red.

This IPO week has been a resounding success for the big names taking to Wall Street. Astera Labs (NASDAQ:ALAB) offering took place at $36 and currently sits up at $66.2 in the premarket, and RDDT holders will be very happy with the start they have seen.

Reddit's public offering has certainly been a bright spot, with shares priced at $34 and giving the company a valuation of $6.4 billion. The IPO was a success, with shares soaring as much as 70% following its debut at the top of its projected range.

Cathie Wood's ARK fund was noted as having added 10,000 RDDT shares to the portfolio. As one of the pre-eminent tech stock holders, it is not exactly a surprise to see this, but it will be interesting to see if this develops into one of her more significant holdings over time, or merely a footnote. The level of entry taken is small, but worth watching.

It will be interesting to see how the stock continues to develop, but we can't finish this one off without taking a quick look at one of the rumblings at Reddit regarding CEO compensation below.

What is going on at Reddit?

CEO Steve Huffman's substantial $193 million salary package has come under scrutiny in recent days and has caused quite a bit of unwanted publicity as far as contrasting fortunes of those involved at Reddit. It is worth noting that the vast proportion (read almost all) of this package is in shares, which as we know from above have done rather well in recent times.

Nevertheless, the revelation is controversial given the platform's reliance on unpaid moderators who manage much of the site's content and community interactions.

The discontent has been palpable among Reddit's community. Conflicts have emerged due to contentious changes to the platform's API and Huffman's remarks towards moderators, who have traditionally been the backbone of Reddit's operations. These tensions reached a peak when nearly 3,500 subreddits temporarily went offline for 48 hours to protest changes earlier in the year, signalling a growing disconnect between the company's administration and its user base.

Adding to the company's challenges, the decision to supply content to Google for AI training is now being scrutinized by the US Federal Trade Commission. This deal, potentially impacting user privacy and the overall perception of the platform, has contributed to the current atmosphere of skepticism.

Reddit's finances are as complex as its community dynamics. While offering users and moderators a chance to participate in the IPO was a gesture toward inclusivity, many declined due to disenchantment with the direction in which Reddit was heading.

The spotlight on Huffman's considerable salary, juxtaposed with Reddit's reliance on unpaid moderators, has stirred a broad discussion about the value of community-led content moderation and the distribution of wealth within tech companies.

Next on the horizon we will be watching to see analysts calls and price targets as RDDT beds in to the NYSE.