Reddit has been on a ride in the week since its stock market debut. 

The hugely popular website - part forum, part social media network, part link aggregator - bills itself as “the front page of the internet” and boasts millions of active users. 

Reddit's debut on the New York Stock Exchange saw its valuation soaring to nearly US$9 billion in the seconds after trading commenced. 

The platform priced its initial public offering at AU$51 per share, which swiftly climbed to AU$71, reflecting an overwhelmingly positive market reception. 

This vigorous start, however, soon encountered scepticism as attention turned to the sustainability of Reddit's business model. 

Despite the initial excitement, Reddit faces challenges familiar to many digital platforms: reliance on advertising revenue, navigating a crowded and competitive market, and justifying its high valuation against a backdrop of financial losses and management upheavals.

Recent developments have highlighted growing concerns among investors regarding short-selling activity. 

Within days of its stellar debut, data from analytics firm Ortex showed a significant portion of Reddit's shares being shorted, indicating a bet by some market participants on the stock's decline. 

This move suggests there is wariness about Reddit's long-term prospects and its ability to maintain the post-IPO momentum.

Furthermore, Reddit's strategic pivot towards monetizing its content for AI training, exemplified by its US$60 million deal with Google, has been met with regulatory scrutiny. 

A Federal Trade Commission's inquiry into this arrangement suggests the potential hurdles in this revenue stream.

The increase in short-selling activity and regulatory challenges adds layers of complexity to Reddit's post-IPO narrative. 

According to some, one of Reddit’s greatest liabilities is its own capricious user base.