Investors circling newly public social media company Reddit (NYSE:RDDT) should hold off on taking a position in the company. Now that the hype surrounding Reddit’s initial public offering (IPO) has died down, Reddit stock has fallen substantially since its market debut in March.
After peaking at $74.90 per share, the stock has dropped 45% to now trade at $40. The share price could pullback further if Reddit’s first earnings report on May 7 is awash in red ink. Analyst and investors will be watching the earnings print carefully to see that Reddit’s losses are improving and the company that runs online message boards is on a path to profitability.
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