Reddit’s fundamentals remain strong despite share price falling back to IPO levels

Ark Invest co-founder and CEO Wood continues to buy shares of Reddit (RDDT-US).

Ark Invest co-founder and CEO Wood continues to buy shares of Reddit (RDDT-US).
Buying more Reddit is important to her; it could also be one of the smart moves Wood must make to get her aggressive growth fund back on its winning streak.
There was excitement when Reddit went public more than two months ago.
Although underwriters priced the stock at $34, the stock opened at $47 and closed its first day at just over $50.
Shares peaked at $74.9 on day 4 but are now back roughly where they were at the March 21 close.
Although the stock price is back to where it started, the fundamentals are strong.
Reddit released its first financial results since going public this week.
The company\’s first-quarter revenue of $243 million grew 48%, beating expectations.
Analysts had expected revenue growth of just 30%.
Although it suffered a huge loss in the quarter, if the stock salary expenses and related taxes brought by the IPO are included and the one-time profit is excluded, Reddit will still have an adjusted profit of US$10 million before interest, taxes, depreciation, and amortization.
The company also had $29 million in free cash flow.
This online community is only as strong as its users and its profitability.
Reddit Season 1 is making impressive progress.
Daily active users grew 37% to 82.7 million; weekly active users soared 40% to 306.2 million.
Right now it\’s basically just a US-based company.
More than half of Reddit\’s daily active users are in the United States and only 18% of its revenue comes from overseas.
The average revenue per user of the platform\’s domestic users is much higher, reaching $4.77 in the first 2 months of this year; while the average revenue per user of international users is only $1.10.

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