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On the heels of Astera Labs\u2019 successful IPO<\/a>, Reddit shares<\/a> skyrocketing 48% to close above $50 may incentivize other companies that are considering their own public offerings, experts told Fortune<\/em>.<\/p>\n \u201cReddit and Astera are both strong green lights for the IPO market picking up. This has been something that we\u2019ve been predicting,\u201d Matt Kennedy, senior IPO strategist at Renaissance Capital, a provider of pre-IPO research that manages two IPO-focused ETFs, told Fortune. <\/em>\u201cWe\u2019ve had rate cuts on the horizon, stock market all-time highs\u2014really strong debuts from tech IPOs has been the missing piece of the puzzle.\u201d<\/p>\n With Astera and Reddit the first major tech IPOs over the past six months, their performance will be closely watched not just by investors but by companies considering their own offerings, Kennedy explained. It may not be immediate, he added, but IPOs could start ramping up toward the end of the year.<\/p>\n Acknowledging there\u2019s pent-up up energy for companies to go public, Andrew Saeta, managing director at secondary marketplace Forge Global, agreed that it still may be a few months before companies feel secure enough to chase an IPO\u2014at least party because of uncertainty over when the Federal Reserve starts cutting key interest rates<\/a>.<\/p>\n Reddit shares<\/a> traded as high as $57.80, a 70% increase from an initial list price of $34<\/a>, but had fallen slightly in after-hours trading as of 7 p.m. ET.<\/p>\n Brianne Lynch, head of market insight for EquityZen, a marketplace for private companies, described Reddit\u2019s first day of swaps as relatively smooth, especially compared with the chatter leading up to the IPO. Shares, which were made available<\/a> to tens of thousands of \u201csuper users,\u201d blasted out of the gate at $47.<\/p>\n Compared with the public debuts of other social media platforms such as Meta (at the time, still Facebook) and Snap<\/a>, Kennedy said Reddit fell somewhere between those two\u2014and definitely is the biggest IPO for a major social platform since Pinterest\u2019s in 2019<\/a>.\u00a0<\/p>\n But unlike other platforms that have offered shares, Reddit\u2019s ecosystem is unique, and its executives now may face additional pressure to keep moderators and users of the site happy. How that affects share prices remains to be seen.<\/p>\n Recent attempts by Reddit executives to monetize content, including an AI-related deal with Google for $60 million annually<\/a>, received pushback from Redditors, including moderators.<\/p>\n Reddit \u201csimply could not have hundreds of thousands of subreddits without the volunteer work, essentially,\u201d Lynch added. \u201cThey need these moderators, and I think that part of the idea of allowing the super users to buy into the IPO is to make them really feel like stakeholders\u2014it\u2019s skin in the game.\u201d<\/p>\n<\/div>\n\nUp 70%<\/h2>\n
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