Reddit Shares Jumped 7% on Tuesday Following Memestocks CrazeReddit shares ( NYSE:RDDT ) closed at $62.34, marking its second-highest close since its IPO in March. The rally began on Monday when Keith Gill, the man who inspired the meme stock mania of 2021, resurfaced online, sending shares of GameStop and AMC soaring. Gill shared a picture on X that showed a video gamer sitting forward on a chair, which is often used by gamers to signal they're taking the task seriously. As of Tuesday's close, the post has been viewed more than 25 million times.
Reddit ( NYSE:RDDT ) played a central role in the meme stock boom three years ago, largely due to the forum WallStreetBets, where traders gather to share tips and, in some cases, band together to drive a stock up or down. GameStop mentions ballooned on WallStreetBets on Monday after Gill's post. The image and a series of other cryptic posts were enough to lift GameStop and AMC by more than 100% in the past two trading sessions. Other stocks that have been bunched in with the meme group rose, including BlackBerry, Koss, and SunPower.
Notable Research Analyst Andrew Boone said he didn't see any fundamental reason for Reddit's rally, but an increase in user activity would help boost the company's advertising business. At the end of the day, more users mean more impressions, which means there are more ads for them to sell. Reddit, ( NYSE:RDDT ) founded 19 years ago, debuted on the New York Stock Exchange on March 21 at $34 a share and ran up as high as $65.11 on March 26.
Technical Outlook
Reddit Shares ( NYSE:RDDT ) shares closed Tuesday's trading session up 7.13% with a Relative Strength Index (RSI) of 60.60, slightly overbought. The 50-day Moving Average crosses the 20-day Moving Average, signaling the exhaustion of downward market momentum.
