The valuation of Reddit, the popular American social news site, skyrocketed to $6 billion after the company raised $250 million in funding from existing and new investors. Writes about this The Wall Street Journal.
The company, which has found itself at the center of a scandal amid a revolt of retail investors from the WallStreetBets subreddit (forum), is set to channel funding to develop the platform, including video, advertising, consumer goods, and international expansion. In addition, Reddit plans to expand its staff.
Reddit CEO Steve Huffman noted that the investor revolt with Reddit had a beneficial effect on the platform. The site’s ad revenue at the end of 2020 nearly doubled in annual terms.
Amateur investors from the WallStreetBets subreddit have previously launched a coordinated attack on hedge funds, which are betting on the decline in the value of shares of the gaming retailer GameStop and other companies. The “Reddit Hamsters” — as Wall Street professionals are called newbie investors — were able to accelerate Gamestop shares by more than 880 percent. Hedge fund Melvin Capital, which made a big bet on the retailer’s fall, lost more than 50 percent of its assets in January 2021.