Reddit, the popular social media platform, celebrated its highly anticipated debut on the New York Stock Exchange (NYSE) under the ticker symbol RDDT, achieving a valuation of $6.4 billion. Steve Huffman, Reddit’s CEO, shared his enthusiasm with CNBC, stating, “the best investors of Reddit are people who use Reddit.”
The company’s shares, initially priced at $34, soared by 48% to close at $50.4, peaking at $57.80—a 70% increase—before settling at $50.44. The IPO allowed the firm and its selling shareholders to raise approximately $748 million, with the company itself securing around $519 million.
In a unique move, the social media platform allocated about 2 million shares to its dedicated users and moderators, allowing them immediate liquidity without any lock-up period. This decision underscores Reddit’s commitment to its community, paralleling Astera Labs’ recent NASDAQ success, which saw a 72% surge in its shares, valuing the company at $9.6 billion.
Advertisement
The journey to the public market was not without delays. Initially filing confidentially for an IPO in December 2021, the San Francisco-based company had to postpone its plans due to market volatility. At that time, Reddit was valued at around $10 billion.
Josh White, assistant professor of finance at Vanderbilt University, commented on the IPO’s success, noting investors’ willingness to overlook the company’s losses in favor of its growth potential—a sentiment not seen in the tech IPO market for at least three years.
Despite a 20% increase in sales from $666.7 million in 2022 to $804 million in 2023, Reddit has yet to turn a profit, with a net loss of $90.8 million in 2023, an improvement from the $158.6 million loss in 2022.
Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit has evolved into a vast network of communities where users can share news, content, and engage in discussions across a wide range of topics. Acquired by Condé Nast in 2006 for $10 million, the US social media company was spun off as an independent entity in 2011, with Advance Publications, Condé Nast’s parent company, remaining the majority shareholder.
Despite facing controversies over hate speech, misinformation, and community management, Reddit remains one of the most influential online platforms, with approximately 76 million users joining one of its 100,000 communities as of December before going public.
