Reddit Goes Public, Lists Shares on New York Stock Exchange

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Facts

  • Reddit shares hit the New York Stock Exchange (NYSE) on Thursday as the social media company launched its highly anticipated initial public offering (IPO) under the ticker 'RDDT.'1
  • The company set its IPO price on Wednesday at the high end of its $31 to $34 per share range, and Reddit sold 15.28M shares at its $34 price while existing shareholders sold another 6.72M.2
  • Reddit shares opened on Thursday 48% above the company's $34 IPO at $47 per share, marking an $8.87B valuation while the IPO valued the company at $6.4B. 'RDDT' peaked at 70% above its debut price, reaching $57.80 per share for a $10.9 market cap.3
  • While the IPO's valuation was below the $10B set by investors during a private funding round in 2021, it still had the largest IPO by a social media company in years. It also comes as the platform looks to become profitable after losing $90.8M in 2023.4
  • Capitalizing on its 73M monthly users and its partnership with Google, the company hopes its $200M in licensing deals for AI models will bring it into a new era of prosperity. However, the Federal Trade Commission announced an inquiry into Reddit's AI licensing deals.5
  • OpenAI CEO Sam Altman is one of Reddit’s largest shareholders, and the company was founded in 2005 by CEO Sam Huffman and Alexis Ohanian. Reddit has been at the forefront of many trends, including the meme stock sage, and it reserved 1.76M IPO shares for loyal users to buy.6

Sources: 1Associated Press, 2CNBC (a), 3CNBC (b), 4The Guardian, 5BBC News and 6Yahoo Finance.

Narratives

  • Narrative A, as provided by The Guardian. For nearly two decades, Reddit has been home to millions of people seeking open information and discussion about any and all topics imaginable. However, all of that could change as Reddit goes public and faces the threat of becoming like all other corporatized social media companies. While there's a need for some content moderation, it's easy to envision Reddit overloading on censorship to appease shareholders and regulators. If that happens, the beloved platform will become no different from its over-sanitized competitors.
  • Narrative B, as provided by The New York Times. Reddit has reached a new status as a company with its IPO, as it goes from a platform of misinformation and vulgarity to a multibillion-dollar tech giant. However, Reddit finally decided to clean up its website and purge forums of overt racism and misogyny, and the results speak for themselves. By moderating inappropriate and hateful content, Reddit was able to attract more users and — more importantly — investors. Reddit's success shows the importance of content moderation, and more companies should follow suit.