The valuation of Reddit, the popular US social news site, skyrocketed to $ 6 billion after the company raised $ 250 billion in funding from existing and new investors. The Wall Street Journal reports.
The company, which has found itself at the center of a scandal amid a riot of retail investors from the WallStreetBets subreddit (forum), is going to channel funding to develop the platform, including video, advertising, consumer goods and international expansion. Additionally, 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 revenues nearly doubled year over year at the end of 2020.
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 the 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.