Just a week after Reddit (NYSE: RDDT) went public, it appears that its executives are capitalizing on the opportunity to sell shares for profit. On March 25 alone, over $40 million worth of shares were sold.
CEO Steve Huffman sold 500,000 shares for a total of $16,150,000, while CTO Christopher Slowe sold 185,000 shares, securing a profit of $5,975,000.
COO Jennifer Wong sold 514,000 shares for $16,602,200, and CFO Andrew Vollero sold 71,765 shares, generating $2,318,020 in profit. All of these sales were executed at an average price of $32.3 per share.
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Is Reddit the new king of meme stocks?
The recent sales by Reddit executives have raised suspicions about their confidence in RDDT stock, but ironically, they seem to have missed out on significant gains considering the average sale price and the subsequent peak of nearly $70 per share just a day after the insider sales on March 25.
Nevertheless, this initial volatility underscores the potential for RDDT to become a meme stock, driven primarily by speculation. Reddit itself acknowledged this risk in its S-1 filing, cautioning about the influence that platforms like r/WallStreetBets could have in triggering short squeezes.
On March 25, RDDT stock surged by 30%, pulling other meme stocks along with it. GameStop (NYSE: GME) saw a 15.4% increase, while Trump Media (NASDAQ: DJT) soared by 35.2%, contributing to the overall momentum of the Goldman Meme Index, as noted by market analyst Holger Zschaepitz.
RDDT stock price chart
In the last trading session, RDDT stock experienced a decline of -11.30%, closing at $57.75. However, in contrast, the previous five trading sessions contributed to a 7.39% increase in its value.
Since its IPO on March 20, RDD shares have surged by 14.49%.
It’s still uncertain whether RDDT stock will evolve into a meme stock and if executives made the right call to sell their holdings. This could be just the initial phase of post-IPO volatility, and only time will tell.
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