Reddit, the popular online social networking website, finally debuted as a publicly traded company on the New York Stock Exchange (NYSE) on Thursday with the ticker symbol “RDDT.”
The San Francisco-based company’s initial public offering (IPO), which was priced between $31 and $34 per share, instantly went up to $47 a share when it began trading on the NYSE (via CNBC).
It then peaked at $57.80 per share early Thursday afternoon, up by 70% above its IPO price, before closing up 48% at $50.44.
This means the business is currently valued at about $9.5 billion.
At the IPO, a total of $750 million was raised, with around $519 million going to Reddit stockholders.
OpenAI CEO Sam Altman, one of Reddit’s biggest shareholders is Sam Altman, owns 12.2 million shares of Reddit stock, reveals the company’s IPO disclosures.
Reddit’s long-awaited IPO had been in the works for more than two years, with the company confidentially filing for an IPO in December 2021.
However, the stock market turmoil due to the Federal Reserve’s quantitative tightening led to a delay. At its IPO price, the company was valued at about $6.5 billion, less than the $10 billion valuation during a private funding round in 2021.
Last year, Reddit’s revenue increased to $804 million, a 20% increase. Advertising accounted for about 98% of its sales, while the remaining 2% came from data licensing.
However, it still incurred a loss of $90.8 million in 2023. The social media website hopes to generate revenue from its platform by licensing its content to companies that train artificial intelligence (AI) models.
In February this year, Reddit struck a deal worth about $60 million per year with Alphabet’s Google so that it could make its content and platform data available for training the tech giant’s AI models.
It’s worth noting that the U.S. Federal Trade Commission (FTC) has launched an inquiry into the company’s AI data licensing programs.
“Given the novel nature of these technologies and commercial arrangements, we are not surprised that the FTC has expressed interest in this area,” Reddit wrote in a regulatory filing. “We do not believe that we have engaged in any unfair or deceptive trade practice.”
With Reddit making its debut in the stock market, it will be interesting to see how the company’s stock continues to perform in the face of the ongoing FTC investigation.
