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What you need to know
- Reddit shares dropped Friday following a report that Advance Magazine Publishers was planning to borrow from its stake in social media platform.
- Tencent Holdings, a Chinese conglomerate, also sold shares according to regulatory filings.
- Insiders, such as CEO Steve Huffman, have sold shares in other recent filings.
Reddit’s (RDDT), stock fell Friday after reports that Advance Magazine Publishers intended to borrow money against its stakes in the social media platform. Also, regulatory filings revealed Chinese conglomerate Tencent Holdings had sold shares.
Advance Magazine Publishers, the parent company of Conde Nast and its brands like GQ and Vanity Fair, is offering 7.8 million of its Reddit shares at a discounted price, "valued at as much as $1.2 billion," to establish a line of credit, according to a Thursday report from Bloomberg.
"Separately, Advance is buying derivatives on the shares, which will allow it to maintain its ownership stake while enabling it to create the credit facility," the report said.
After the markets closed on Thursday, the magazine conglomerate announced plans to sell 10,000,000 shares with a value of $1.58billion.
Tencent is continuing to sell Reddit share
Tencent Holdings announced Thursday its latest sold share series, along with the sale planned by Advance. It is the third time this month that Tencent Holdings has disclosed such a filing.
The company sold just over 650,000 shares earlier this week, bringing the company's stake to about 7.7 million shares, down from roughly 10.7 million shares earlier this month. At Friday's recent price around $144, down from Thursday's record intraday high of $158.49, Tencent's stake is worth around $1.1 billion.
Separately, Reddit CEO Steve Huffman sold shares earlier this month. Chief Operating Officer Jennifer Wong was also a seller.
Reddit shares have recently been down more than 8%. However, they still remain nearly triple their $50.44 closing price on its first trading day after its initial public offer (IPO) of March.
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