SteelPeak Wealth LLC Makes New $1.88 Million Investment in Reddit Inc. $RDDT

Key Points

• SteelPeak Wealth opened a new Reddit position worth approximately $1.88 million by purchasing 13,201 shares in the third quarter. Other institutions, including Wellington Management and State Street, also increased their holdings.
• Reddit’s latest quarter exceeded expectations, with EPS of $1.25 versus the $0.95 consensus and revenue of $804.9 million, up 61% year over year. Analysts maintain a “Moderate Buy” consensus with an average price target of $219.29.
• Insiders have been selling shares, including COO Jennifer Wong’s $9.03 million transaction and CEO Steve Huffman’s approximately $2.74 million sale, though the trades were conducted under pre-arranged Rule 10b5-1 plans. Reddit is scheduled to report third-quarter results on October 29.

SteelPeak Wealth LLC purchased a new position in shares of Reddit Inc. (NYSE:RDDT - Free Report) in the third quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund purchased 13,201 shares of the company's stock, valued at approximately $1,880,000.

Other institutional investors also recently bought and sold shares of the company. Wellington Management Group LLP grew its position in shares of Reddit by 21.8% in the 2nd quarter. Wellington Management Group LLP now owns 1,564,535 shares of the company's stock valued at $271,572,000 after buying an additional 280,030 shares during the last quarter. Moore Capital Management LP raised its stake in Reddit by 611.4% during the 2nd quarter. Moore Capital Management LP now owns 12,577 shares of the company's stock worth $2,183,000 after acquiring an additional 10,809 shares in the last quarter. State Street Corp lifted its position in Reddit by 8.7% in the second quarter. State Street Corp now owns 2,979,587 shares of the company's stock valued at $517,197,000 after acquiring an additional 237,523 shares during the last quarter. Light Street Capital Management LLC purchased a new stake in Reddit in the second quarter valued at $31,678,000. Finally, PensionDanmark Pensionsforsikringsaktieselskab boosted its stake in Reddit by 102.3% in the second quarter. PensionDanmark Pensionsforsikringsaktieselskab now owns 19,120 shares of the company's stock valued at $3,319,000 after acquiring an additional 9,670 shares in the last quarter.

Reddit News Summary

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: CNBC’s Jim Cramer recommended buying Reddit, describing the shares as “inexpensive.” The endorsement could improve retail-investor sentiment and draw attention to Reddit’s valuation. Jim Cramer recommends Reddit
• Neutral Sentiment: Reddit will report third-quarter results on Thursday, October 29. Investors are likely to focus on advertising growth, user trends and management’s outlook following the company’s previous quarterly revenue increase of 61% year over year. Reddit third-quarter earnings announcement
• Neutral Sentiment: Goldman Sachs maintained its Hold rating on RDDT, indicating that the firm does not see a sufficiently compelling risk-reward profile at current levels. Goldman Sachs maintains Hold rating
• Negative Sentiment: CEO Steve Huffman sold 17,308 shares for approximately $2.74 million, reducing his direct holdings by 4.89%. COO Jennifer Wong separately sold 60,000 shares for about $9.03 million, reducing her position by 5.60%. Both transactions were made under pre-arranged Rule 10b5-1 plans, which lessens—but does not eliminate—the negative signaling effect of insider selling. Reddit insider sales

Insider Activity

In other news, Director Robert Sauerberg sold 5,128 shares of the stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $159.92, for a total transaction of $820,069.76. Following the completion of the sale, the director owned 27,087 shares in the company, valued at approximately $4,331,753.04. This represents a 15.92% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, COO Jennifer Wong sold 60,000 shares of the stock in a transaction dated Wednesday, October 14th. The stock was sold at an average price of $150.55, for a total transaction of $9,033,000.00. Following the sale, the chief operating officer owned 1,012,226 shares of the company's stock, valued at $152,390,624.30. This trade represents a 5.60% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 306,052 shares of company stock valued at $49,754,523. Insiders own 28.48% of the company's stock.

Analyst Upgrades and Downgrades

RDDT has been the topic of several research reports. BNP Paribas Exane initiated coverage on Reddit in a report on Friday, September 18th. They set a "neutral" rating and a $180.00 price objective on the stock. Wells Fargo & Company cut their target price on Reddit from $187.00 to $142.00 and set an "equal weight" rating on the stock in a research report on Friday, July 31st. Guggenheim reissued a "buy" rating on shares of Reddit in a report on Wednesday, September 16th. Zacks Research cut Reddit from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, August 25th. Finally, UBS Group reissued a "buy" rating on shares of Reddit in a research report on Friday, July 31st. Two research analysts have rated the stock with a Strong Buy rating, seventeen have issued a Buy rating and ten have issued a Hold rating to the stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $219.29.

Reddit Price Performance

Shares of NYSE:RDDT opened at $155.97 on Monday. The stock has a market cap of $30.01 billion, a P/E ratio of 36.27, a P/E/G ratio of 0.72 and a beta of 2.05. The firm has a fifty day moving average price of $154.22 and a 200 day moving average price of $161.65. Reddit Inc. has a 1-year low of $119.27 and a 1-year high of $263.50.

Reddit (NYSE:RDDT - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The company reported $1.25 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.95 by $0.30. The company had revenue of $804.91 million for the quarter, compared to the consensus estimate of $731.00 million. Reddit had a net margin of 31.35% and a return on equity of 29.02%. Reddit's revenue for the quarter was up 61.0% on a year-over-year basis. During the same period last year, the firm posted $0.45 EPS. Sell-side analysts expect that Reddit Inc. will post 5.27 EPS for the current fiscal year.

About Reddit

Reddit, Inc operates a global online platform where users participate in communities organized around shared interests, topics and activities. Members can submit text posts, links, images and videos, as well as comment on and vote on content. The platform includes thousands of communities, commonly known as subreddits, covering subjects such as news, entertainment, technology, sports, finance and lifestyle.

Reddit generates revenue primarily through digital advertising, offering advertisers access to audiences based on community interests and user engagement.

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