[News Terms] Reddit Hits Jackpot on First Day of Listing, Becomes a 'Meme Stock'

On the 21st (local time), Reddit, a U.S. social networking service (SNS) company that succeeded in attracting attention on its first day listed on the New York Stock Exchange, is considered the holy ground of meme stocks.

Reddit CEO Steve Huffman is hugging the mascot Snoo as Reddit begins trading at the New York Stock Exchange (NYSE) in New York on the 21st (local time).
[Photo by AFP News Agency]

Here, meme stocks refer to stocks that gain popularity among individual investors through word of mouth on online communities or social media (SNS). The term "meme" was introduced by British evolutionary biologist Richard Dawkins in his 1976 book The Selfish Gene, meaning cultural elements acquired through imitation rather than genetic methods.

Meme stocks started in 2021 in Reddit’s stock discussion forum "WallStreetBets." At that time, individual investors fought against hedge funds’ short selling of GameStop by sharing posts in Reddit’s stock discussion forum urging "Buy GameStop," leading to a surge in GameStop’s stock price. Since then, individual investors have continued the meme stock craze by sharing entertaining photos or videos related to stocks in this forum, causing a rapid increase in purchases of those stocks. Besides GameStop, movie theater chain AMC and kitchenware retailer Bed Bath & Beyond are representative meme stocks.

However, caution is needed when investing in meme stocks because their prices tend to fluctuate sharply based on social issues or internet trends rather than corporate performance or value.

Meanwhile, Reddit started trading at $47, 38% higher than the public offering price, on its first day of listing and closed at $50.44, up 48.4%. During the session, it reached a high of $57.8. Major shareholders include Newhouse family’s Advance Magazine Publishers (30%), Chinese company Tencent (11%), and OpenAI CEO Sam Altman (7.6%).

This content was produced with the assistance of AI translation services.