Announcement comes after Reddit user campaign inflated the stock prices for several companies including GameStop and AMC Theatres
Reddit announced Monday that it has raised $250 million in new funding from both new and current investors, which the company said it intends to use for “strategic investments” that include “video, advertising, consumer products” as well as an expansion “into international markets.”
The company says it will also “double” its total staff in 2021. It’s surprising not only for the pace of growth but also that such a relatively lean team has been behind one of the most visited websites in the world. We are confident in our mission to provide community and belonging to everyone and are well-positioned for the growth we have planned,” Reddit said in a statement.
The announcement follows a wild couple of weeks in which members of a subReddit called r/wallstreetbets rallied around the stock of several ailing companies, including video game store chain GameStop and movie theater chain AMC Entertainment, causing huge spikes in their prices per share — and costing billions of dollars for hedge funds that were short-selling the stocks. AMC Entertainment was even able to reduce its immense debt by $600 million thanks to the stock surge.
Of course things came back down to earth eventually. After briefly rising above $20 in late January, AMC’s stock price dropped by 50% last week and as of this writing was selling for just over $6 in after hours trading.
According to the New York Times, Reddit is valued at $6 billion.
More to comes…
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