Reddit Shares Surge Over 48% in Their First Day of Trading

Reddit (RDDT) shares surged over 48% in the company’s first day trading on the New York Stock Exchange (NYSE), blowing well past the social media company’s initial public offering (IPO) price.

Reddit priced its IPO at $34 per share, at the higher end of its anticipated range, and shares opened at $47 before soaring to finish at $50.44 Thursday.

Reddit’s debut marks the first for a social media company since 2019 and could point to higher appetite for new tech stocks after an extended dry spell for IPOs from 2021’s highs.

The social network had initially pursued an IPO in 2021 before delaying those plans. The 2021 IPO reportedly sought a valuation around $15 billion, more than double the valuation Reddit anticipated this time, thanks to a cooler IPO market and sell-offs in tech stocks in the time since its first attempted IPO.

Reddit filed for an IPO again last month, revealing a number of details about Reddit’s finances, including its $804 million in revenue in 2023, the platform’s inability to turn a profit in its history, and the company’s investments in cryptocurrency like Bitcoin and Ether.

It also revealed the size of Reddit’s user base, with some 73 million daily active users in the fourth quarter of 2023, along with Reddit’s plans to reserve an unspecified number of shares for its users and moderators, with priority given to those with larger contributions to Reddit’s community over the years.

OpenAI Chief Executive Officer Sam Altman was revealed as an investor as well, owning about 9% of voting power for investments of over $60 million.

Reddit’s IPO came as Nokia claimed earlier this week that Reddit had violated some of the company’s patents, and Reddit also informed the SEC that the Federal Trade Commission (FTC) is looking into its deal with Google (GOOGL) to include content from the platform in training the tech giant’s artificial intelligence (AI) models.