Reddit’s (RDDT) Director, Michael Seibel, recently sold shares worth nearly $9.1 million on November 1. This decision comes as the company’s stock price has experienced significant growth, with shares rising by 125.5% in the past three months.
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The surge in stock price is mainly attributed to Reddit’s increasing user base and engagement. Furthermore, the company’s strong Q3 earnings report boosted the stock price. RDDT reported a profit for the first time in its history, driven by robust digital advertising revenue and AI content licensing deals.
Reddit is a social media platform and online community where users share, discuss, and vote on content across a wide range of topics.
Closer Look at the Insider’s Transaction
According to the most recent SEC filing, Seibel divested 81,697 shares of RDDT at prices ranging from $110.62 to $112.32 per share. Simultaneously, he exercised an option to purchase 50,000 shares. Importantly, Seibel still owns around 5,128 shares of RDDT stock.
On TipRanks, Reddit stock currently has a Negative Insider Confidence Signal, based on Informative Sell transactions worth $3.4 million undertaken in the last three months.
It is important to keep an eye on the Informative trades of corporate insiders, given their knowledge of a company’s growth potential. Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Top-Rated Citi Analyst Bullish on RDDT
While insiders are bearish on the stock, Top-rated Citi analyst Ronald Josey reiterated a Buy rating on RDDT with a price target of $120 per share (to see Josey’s track record, click here).
The analyst is optimistic about Reddit due to its strong user base and growing monetization opportunities. Also, Reddit’s investments in features like Shreddit and machine learning are expected to enhance user engagement and drive growth. Moreover, the company’s progress in advertising, particularly with automated ad tools, is poised to attract more advertisers and increase revenue.
Is Reddit Stock a Good Investment?
Turning to Wall Street, RDDT stock has a Moderate Buy consensus rating based on 10 Buys and six Holds assigned in the last three months. At $77.81, the average Reddit price target implies a 36.52% downside potential.
