Reddit revives a sleepy IPO market

By Philip van Doorn

Also: Stormy seas for Apple, Nvidia news, alternatives to tech stocks and advice on how to avoid taxes

Rising interest rates in 2022 and 2023 subdued what had been a hot market for initial public offerings. But IPO activity has perked up and Reddit Inc. may stoke the fire even more.

Reddit Inc. (RDDT) priced its initial public offering at $34 a share on Wednesday. Despite questions about how the company would achieve profitability, the stock began trading at $47 a share on Thursday and closed at $50.44 - up 48% from the IPO price.

The stock had pulled back 2% in early afternoon trading Friday.

The MarketWatch Companies team provided running live coverage on the day of the IPO, including comments from Reddit's executives and comparisons with other IPOs.

Jeremy Owens looked into what appeared to be a sweetheart deal for Reddit CEO Steve Huffman.

A user climbs aboard: Reddit moderator who saw meme-stock craze is buying into platform's IPO

Another IPO jumper: Astera Labs' stock soars, as investors cheer the debut of a new AI chip play

A stormy sea for Apple

So far this year, the S&P 500 SPX has returned 10.3%, while shares of Apple Inc.' (AAPL) have fallen 10.9%, both with dividends reinvested. One reason for this contrast might be that Apple's stock trades for 25.1 times the consensus 12-month earnings-per-share estimate among analysts polled by FactSet, while the S&P 500 trades at a weighted forward price-to-earnings ratio of 21.

Apple's premium valuation isn't supported by a rapid expected growth pace. Based on FactSet's consensus calendar-year estimates, Apple's compound annual growth rate for earnings per share through 2025 is expected to be 8.2%, while the company's CAGR for revenue is expected to be 4.2%. For the S&P 500, the EPS CAGR is expected to be 12.3% through 2025, with a sales CAGR of 5.3%.

And now Apple is being targeted by the Justice Department and 16 state attorneys general for violations of antitrust laws.

Chris Matthews and Jon Swartz explained why things may turn out differently this time for Apple, after the company's success in handling previous regulatory challenges.

Therese Poletti shed light on why the Justice Department might not have a good legal argument against Apple based on precedent.

More on Apple:

AI brings existential crisis for Apple, Salesforce and tech's old guard: Partner or perishWill an Apple-Google AI partnership get past regulators?

The latest on Nvidia

It was another bang-up week for Nividia Corp. (NVDA), with shares rising 4% from a week earlier to close at $914.35 on Thursday. The stock was up 85% for 2024 after more than tripling during 2023.

On Monday, Nvidia held its GTC conference, during which CEO Jensen Huang described new products that promised an exponential increase in power over the graphics processing units that have dominated the artificial-intelligence equipment rollout over the past year.

Here's a sampling of reaction following Nvidia's event:

Nvidia's stock gets its 'Taylor Swift' moment, and the bulls are cheeringNvidia shows it is still on track for AI dominanceThis analyst thinks Nvidia is headed for a $10 trillion market cap. These are other stocks she's eyeing.Dell's stock gets an Nvidia bump, but AMD shares among chip names under pressure

More tech news - Micron Technology Inc. (MU):

Micron's stock rockets higher as company delivers big, AI-fueled earnings beatMicron blows away Wall Street estimates, but a specter potentially looms

Related: AI talk is surging during company earnings calls - and so are those companies' shares

Taxes, cash gifts and inheritance

This week in the Fix My Portfolio column, Beth Pinsker had advice for a couple looking to leave money to their children, but to do so efficiently. The questions were about tax avoidance strategies and whether or not it would be best for them to begin giving large annual cash gifts to the children now.

A different tax question: My sister is in her 80s, and she recently remarried, but her less-wealthy husband insists on filing a joint tax return. Should she be concerned?

Active fund managers improve performance against indexes

You might be well aware of how difficult it is for a money manager to run a portfolio of stocks and beat the performance of a market index. Last year, active managers' performance against indexes improved a bit, according to Morningstar.

To consider the importance of the Morningstar data and whether or not a new trend might be signaled, Mark Hulbert took a long hard look at the performance of active versus passive management. Here's what he found.

More stock-market coverage:

Wall Street's biggest bull renews call for small-cap stocks to rise 50% in 2024Options traders are reining in their bullish stock-market bets

Beneficiaries and Social Security

Alessandra Malito writes the Help Me Retire column.

This week she helped a woman whose husband died but had not listed a beneficiary for his retirement account.

And then she dug deep into Social Security rules to answer a tricky question: If you are taking Social Security disability benefits before the age of 62, will you need to switch to receiving retirement benefits at that age?

Housing and real-estate investing

The settlement of lawsuits against the National Association of Realtors might change how you buy or sell a home - a seller may no longer need to foot the bill for a buyer's agent. Aarthi Swaminathan dug into the settlement and how it might affect you as the real-estate industry changes.

Reaction: Commissions are 'not the cause' of America's affordable housing crisis, Realtors say as they push back at Biden

A different market: Can aging boomers rescue the ailing commercial real-estate industry? This $2 billion fund is betting on it.

Hedging a bet on Japan

Japan's central bank increased interest rates on Tuesday for the first time since 2007. But the Bank of Japan moved its policy rate from negative-0.1% to a range of between 0% to 0.1%. That is a measly yield when compared with the U.S. federal-funds rate, which is in a target range of 5.25% to 5.50%.

Such low interest rates in Japan mean currency risks for investors who have enjoyed that country's bull market for stocks. In this week's ETF Wrap newsletter, Isabel Wang described an easy way to hedge that risk.

Advice on difficult family money matters

If a friend were to ask you for advice about a financial conflict within their family, your first reaction might be to run. But Quentin Fottrell - the Moneyist - digs in:

My mother-in-law will leave her house to her five grandchildren rather than her two sons. But her elder son won't move out of her home. Is this a bad sign?My husband and I signed a postnuptial. Will I be able to keep two houses that I bought during our marriage - now we're headed for divorce?My boyfriend owns his home and I pay him rent. I have five kids and he has two children. What happens to me if he dies?My friend invested $50,000 in her brother's failed property business. On her deathbed, he pledged to repay her children. What now?'I'm 60 and looking to retire': My brother was released from jail and wants to buy back our parents' foreclosed home. Should I help him?My elderly cousin's nursing home coerced her into changing her will - and selling her house. She was worth millions. Can they get away with this?

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-Philip van Doorn

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03-22-24 1251ET

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