The road to Reddit’s initial public offering has been a long one; in the 19 years since its founding, the social media giant has led many lives. It was an independent startup, and then it wasn’t, until it was again. It despised the idea of selling ads or censoring user content, but eventually found itself deeply pursuing both. It’s had half-a-dozen leaders, including current CEO Steve Huffman—also known by his username Spez—who is on his second tour of duty.
Now its post-IPO life has begun. Reddit shares surged as much as 60 percent in the company’s first hour of trading on New York Stock Exchange, under the ticker RDDT. As a publicly traded company, Reddit will have to meet user and revenue growth expectations quarter after quarter or face the public wrath of investors. Huffman told NPR last year it was time for Reddit to “grow up and behave like an adult company.”
The IPO had valued Reddit at almost $6.5 billion, a haircut from the $10 billion the company was valued back in 2021. Thursday’s runup in shares pushed the market capitalization, however, above $8 billion at the time of writing.
Heading into the IPO, investors had worried that Reddit’s often rocky relationship with its users—the company suffered a user revolt last year that switched off thousands of subreddits—would also dog the platform at the opening bell. Reddit had reserved 8 percent of available shares for eligible users and moderators, threatening volatility if a majority dumped their shares on day one.
Some employees fear the company’s internal culture will turn more corporate, and users worry that profit-making pursuits will drown out the lively and dependable conversations that the influential online hub is known for. Speaking to Bloomberg from the New York Stock exchange, chief operating officer Jen Wong said Reddit was focused on three markets for the future of its business: advertising, transactions between users, and selling its data to AI companies. “Reddit’s corpus of information is incredibly important to the training of large language models,” Wong said, adding that the company was in possession of data that reflected 19 years of human experience, organized by topic. Reddit reported last week that the Federal Trade Commission had opened an inquiry into its sale of user data to AI giants.
A life-size version of Reddit’s alien mascot SNOO rang the opening bell of the New York Stock Exchange on Thursday, to cheers and applause. Reddit priced shares at $34 in their initial public offering on Wednesday, raising over $500 million for the company and more than $200 million for shareholders who sold some of their stakes in the sale. By Thursday afternoon in New York, those shares had jumped to $53. Stocks that surge on opening, however, have been known to dramatically slide later in the day.
A big concern ahead of the public listing was that Reddit, the platform that gave birth to the memestocks of 2021, could also suffer the wild price swings caused by large numbers of investors coordinating their strategy over social media, including Reddit itself on forums such as r/wallstreetbets.
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