Benzinga - by Surbhi Jain, .
Reddit Inc (NYSE:RDDT), the social media platform that sparked a market frenzy with its initial public offering (IPO), is now witnessing a surge in bullish options activity.
According to recent reports and discussions on online forums like r/stocks and r/wallstreetbets, shares of Reddit skyrocketed by 48% on the NYSE following its debut last week.
This is despite the company’s history of posting no annual profit since its inception in 2005.
As of Monday, March 25, Reddit’s stock continued its upward trajectory, climbing as much as 16%, with trading volume indicating significant interest from investors. Options trading on Reddit saw a flurry of activity, with approximately 39,000 contracts exchanged by early afternoon, suggesting a strong appetite for speculation.
Related: Reddit Stock Is Rising Monday: What’s Going On?
Reddit options launch draws bulls as shares extend gainsbyu/mcaffrey instocks
Reddit IPO Amidst Debate And Comparisons
This sentiment aligns with the trend seen in meme stocks, where individual investors rally around stocks with viral popularity, often using options to express their optimism.
However, not all investors share the same outlook. Some, like Redditor JoeBeck37, remain skeptical and have taken positions in put options, anticipating a decline in Reddit’s stock value.
Others, such as gravywins, expressed doubts about the company’s financials and questioned the market’s enthusiasm.
Despite differing opinions, one thing remains clear: Reddit’s IPO has stirred significant debate among retail investors.
While some see potential for further upside, others caution against the risks associated with investing in a company yet to turn a profit.
Discussion on Reddit also touched upon comparisons with other recent IPOs, like Instacart aka Maplebear Inc. (NASDAQ:CART), suggesting that Reddit’s valuation may be more reasonable in comparison.
However, concerns linger regarding the company’s ability to monetize its platform effectively and achieve sustainable growth in the long term.
Another GameStop-Like Moonshot?
As Reddit continues to captivate the attention of investors, the debate between bullish and bearish sentiments rages on. While some foresee a potential moonshot akin to GameStop Corp‘s (NYSE:GME) meteoric rise, others remain cautious, highlighting the inherent risks associated with speculative trading.
Ultimately, only time will tell whether Reddit’s stock can sustain its momentum or if it will succumb to the volatility that has come to define meme stocks in the eyes of Wall Street. Until then, the battle between the bulls and bears on Reddit and beyond will undoubtedly continue.
Read Next: WallStreetBets Celebrates Reddit IPO ‘Tendies’: ‘Shout Out To Reddit For The 20K Profit’
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