Traders work as the Reddit logo is displayed at the New York Stock Exchange (NYSE) in New York, the United States, March 21, 2024.
Brendan McDermid | Reuters
Reddit Stocks jumped 7% on Tuesday, climbing for a second straight day after retail traders went on a buying spree of so-called meme stocks.
The stock closed at $62.34, Reddit’s second-highest close since its March IPO. The rally began Monday when “Roaring Kitty,” aka Keith Gill, the man who inspired the stock craze of 2021, resurfaced online, sending shares of Stoppage of play And AMC fly away.
Gill shared a photo on X showing a video gamer sitting forward in a chair. The image is often used by players to indicate that they are taking the task seriously. As of Tuesday’s close, the post had been viewed more than 25 million times, according to X.
Reddit played a central role in the meme stock boom three years ago, largely thanks to the WallStreetBets forum, where traders come together to share tips and, in some cases, band together to push a stock up or down . Mentions of GameStop exploded on WallStreetBets on Monday after Gill’s post.
The image and a series of other cryptic posts were enough to send GameStop and AMC up more than 100% over the past two trading sessions. Other stocks grouped in the meme group rose, including Blackberry, Koss And Solar power.
“It appears that retail investors are once again becoming more optimistic and willing to take more risk,” Neil Wilson, chief market analyst at Finalto, said in a note. “There is no fundamental reason for this decision as such: GME’s last earnings report was catastrophic.”
Citizens JMP equity research analyst Andrew Boone told CNBC on Monday that he sees no fundamental reason for Reddit’s rally. Still, he said an increase in user activity would help boost the company’s advertising business.
“Ultimately, more users means more impressions, which means they have more ads to sell,” Boone said.
Reddit, founded 19 years ago, debuted on the New York Stock Exchange on March 21 at $34 per share and climbed as high as $65.11 on March 26. The stock then began to sell off, falling as low as $39.17 in April, before falling further. a boost from Reddit’s better-than-expected earnings report earlier this month.
WATCH: Reddit Stocks Jump on Profits
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