'So far, so great' for newly public Reddit, says moderator-turned-investor

By James Rogers

Reddit invited users and moderators to participate in its initial public offering earlier this year

Just over 60 days since Reddit Inc.'s initial public offering, one of the social-media platform's moderators-turned-investors says she is "really pleased" with how things are going.

Heather Lagaso told MarketWatch that she invested "$800 and some change" in Reddit (RDDT) after the company invited users and moderators who have contributed to the platform to buy shares in its March IPO. Users and moderators who created an account on or before Jan. 1, 2024, and were "in good standing" were potentially eligible for the directed-share program, the company said in its S-1 filing.

Lagaso has been a Reddit user for more than 16 years and has extensive experience as a moderator on the platform. She has moderated a host of subreddits, including r/Salem, r/Woodburn, r/8yearclub and r/CemeteryPorn, which has 138,000 members and is devoted to "high-quality images of cemeteries and graves."

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The company has done a good job of explaining the IPO to potential investors, according to Lagaso. "There's a lot of people I see participating for the first time," she told MarketWatch. "In that way it has made it all inclusive."

Reddit shares have risen 12.4% since their closing price on the day of the company's IPO on March 21. The IPO priced at $34 a share, at the high end of its target range and ended the first day's trading at $50.44. The stock closed at $56.69 Wednesday, an increase of 66.7% on the IPO price. The shares are up 1.7% in premarket trades Thursday. "So far, so great, really," said Lagaso. "I am really pleased."

"I am not going anywhere," she added. "I think there's a lot of potential for this to go up." Lagaso, who works for the state of Oregon and is currently on a break from moderating, told MarketWatch that Reddit's evolution makes her feel like "a proud auntie."

Related: Reddit's first post-IPO results are 'mission accomplished,' with international and data-licensing opportunities ahead

Reddit's Directed Share Program was set up to allow eligible users and moderators to own a piece of the company. Participants are not subject to the 180-day lockup period company insiders.

Earlier this month, Reddit's first quarterly results as a public company sent the company's stock surging on better-than-expected revenue and a narrower-than-expected loss. Analysts also say there are international and new data-licensing opportunities ahead for the social-media platform.

Last week, Reddit and OpenAI announced a partnership to bring the social-media platform's content to OpenAI's ChatGPT service. OpenAI is also gaining access to Reddit's Data API and will become an advertising partner. As part of the deal, Reddit will also offer new AI-powered features to its users and moderators.

-James Rogers

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05-23-24 0707ET

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