Reddit Stock Pulls Back From Record Highs After Tencent Cuts Stake Yet Again: Retail Turns Apprehensive
By Stocktwits Inc | First Published Nov 22, 2024, 12:17 PM ISTReddit went public in late March at an initial public offering valuation of $6.4 billion, and its market cap is currently at $27.75 billion.
Reddit, Inc. ($RDDT) shares came under selling pressure late Thursday after the community-focused social media company disclosed that an investor sold a portion of its holdings this week.
In a late-Thursday filing on Form 4 with the SEC, San Francisco based Reddit revealed that Chinese internet giant Tencent Holdings Ltd. ($TCEHY) reduced its stake in the company by 654,979 shares or $88.46 million. The shares were sold on Tuesday.
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The recent selling comes close on the heels of Tencent disposing of 882,583 Reddit shares between Nov. 14 and Nov. 18. Ahead of this, Tencent sold about 1.5 million shares through a series of transactions, according to Marketwatch.
The report estimated Tencent’s Reddit sales this month at nearly $400 million, translating to a 28% stake reduction.
Following November’s brisk selling, Tencent is still left with 7.7 million Reddit shares.
Reddit also saw a spate of inside selling this month, with CEO Steven Huffman and Chief Operating Officer Jennifer Wong part-liquidating their respective holdings.
Reddit, which went public in late-March, has seen its shares rise strongly in November. The stock hit an intraday high of $158.49 on Thursday and a closing high of $158.02 in the same session.
Retail sentiment toward Reddit stock deteriorated, with the sentiment meter on Stocktwits showing a reading of 17/100 (‘extremely bearish’), down from 53/100 (‘neutral’) on Thursday. The worsening sentiment was accompanied by growing retail chatter.
Reddit stock fell 7.70% in after-hours session on Thurrsday.
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