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Reddit people downvote excellent Wall Street debut

March 21 (mod1s) - As Reddit's (RDDT.N), opens new tab stock market valuation climbed to over $9 billion in its Wall Street debut on Thursday, commentators on the social media website's major stock trading forums raised doubt about the prospects for the money-losing company's shares. 

"Where can I buy puts?," questioned user savage011, among the highly rated comments on Reddit's "wallstreetbets" thread after the business and its underwriters priced its initial public offering at the top of the intended range of $31 to $34 per share on Wednesday, generating $748 million.

Buying put options allow traders the right to sell a stock at a predetermined price, earning money if the stock's market price declines. 

Reddit's stock rose 48% in its debut day on Wall Street, finishing at $50.44 a share. 

Its excellent launch - in the works for almost two years - is the latest indicator of revival in investors' enthusiasm for IPOs after increasing interest rates in 2022 rendered investors risk apprehensive. 

Unusually, Reddit reserved 8% of the shares it was selling for users and moderators on its website, for some board members, as well as friends and family members of its workers and directors. Courting individual investors, Reddit also pitched its IPO to customers of online stockbroker Robinhood Markets (HOOD.O), opens new tab and SoFi Technologies (SOFI.O), opens new tab.

But recent Reddit comment threads on the IPO have focused extensively on the site's lack of profitability since its start in 2005. 

"I ended up not taking part in the IPO. I don't know enough about its intentions to really generate money to invest in it," said user atdharris on Reddit's "stocks" section, which claims 6.6 million subscribers. 

Investors seeking to wager against Reddit's stock will have a chance early next week. Nasdaq intends to offer options on Reddit beginning Monday. Other options exchanges are anticipated to post contracts on Reddit at the same time or shortly afterward.

Reddit's popularity surged during the "meme-stock" saga of 2021, when self-deprecating amateur traders collaborated on wallstreetbets to drive a massive rally in the shares of GameStop (GME.N), opens new tab and other struggling companies, leading to deep losses for hedge funds that had bet heavily against them by establishing short positions. 

Over 15 million customers are enrolled to wallstreetbets. 

Other Reddit users on Thursday were skeptical of IPO investment in general, with many of Wall Street's high profile stock market debuts lagging the S&P 500 in recent years.


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