The highly anticipated Reddit IPO (NYSE: RDDT) has not gone as smoothly as expected, with the stock experiencing significant volatility since its debut. Initially surging by 30%, RDDT stock has also plummeted by the same amount, ultimately leaving its current price almost unchanged at $50.45.
Many are quick to blame short-sellers and the stock’s meme status for its lackluster performance. However, a closer look reveals a more complex situation involving Reddit’s own executives. Since going public on March 21, Reddit CEO Steve Huffman and other executives have sold over $40 million worth of RDDT shares, further impacting the stock’s performance.
The lack of a post-IPO lockup period for executives is another concerning factor. Typically, insiders are restricted from selling shares for a period after the IPO, but Reddit’s executives have been able to cash out early.
Despite closing at $50.45 on April 2 with a 9.75% increase, RDDT stock has seen a decline of -25.46% over the past five trading sessions, essentially erasing any gains made since its debut. This lack of progress combined with insider trading raises questions within the trading community and could potentially harm the stock’s reputation and valuation moving forward.
Investors are advised to proceed with caution and consider the risks involved in trading RDDT stock.
