Reddit, the popular online forum website, made its debut on the New York Stock Exchange (NYSE) on March 21, 2024. The opening bell was rung by Reddit CEO Steve Huffman and NYSE president Lynn Martin, marking the start of trading for the company. Reddit's shares soared as much as 70% in their debut, with the stock opening at $47 and reaching a high of $57.80. The company raised about $750 million from its initial public offering (IPO), with a market cap reaching approximately $10.9 billion.
The IPO of Reddit, under the ticker symbol "RDDT," comes after a dry spell for tech companies going public. Since the peak of the technology boom in late 2021, few venture-backed tech companies have entered the public market. Reddit's IPO valuation of $6.5 billion is a decrease from its private market valuation of $10 billion in 2021. The company reported annual sales of $804 million in 2023, with a net loss of $90.8 million.
Reddit is banking on data licensing as a major revenue source, with plans to recognize approximately $66.4 million in revenue from data licensing deals this year. The company has also entered into an expanded partnership with Google to share Reddit data for AI training. However, Reddit revealed that the Federal Trade Commission is conducting an inquiry into its data licensing practices.
Major shareholders of Reddit include OpenAI CEO Sam Altman, Tencent, and Advance Magazine Publishers. Altman's stake in the company was worth over $400 million before trading began. Reddit's IPO also included a directed-share program for its top moderators and users.
While Redditors have expressed skepticism about the IPO due to the company's financials and relationship with moderators, CEO Steve Huffman remains optimistic. He acknowledged the platform's outspoken users but emphasized Reddit as their beloved internet home. As Reddit enters the public market, it faces competition from companies like X, Discord, Wikipedia, and Amazon's Twitch.