Reddit made a spectacular entrance on Wall Street with its initial public offering (IPO) on Thursday. The San Francisco-based company’s shares soared out of the gate, closing regular trading at $50.31 per share, a remarkable 48% surge from the IPO price of $34.
The highly anticipated market debut saw Reddit’s stock, listed under the ticker symbol “RDDT” on the New York Stock Exchange, reach a high of $57.80 per share during midday trading, marking a staggering 70% increase from its opening price.
Through its IPO on Wednesday, Reddit raised at least $519 million, giving the company an initial market capitalization of $6.4 billion. However, by the end of the first trading day, Reddit’s market capitalization had swelled to $9.4 billion based on its diluted share count, reflecting the overwhelming investor demand for the social media platform.
Reddit’s successful Wall Street debut comes at a time when the company has yet to report a profit. Since its launch in 2005, Reddit has accumulated losses totaling $717 million. In the previous year alone, the company reported a loss of $90.8 million on revenues of $804 million.
Despite its unprofitable history, Reddit’s strong brand recognition, loyal user base, and potential for future growth have captivated investors. The platform’s unique community-driven model, which fosters diverse online discussions and content creation, has positioned it as a prominent player in the social media landscape.
Reddit’s IPO marks a significant milestone for the San Francisco tech scene, as it becomes the city’s first company to go public since Instacart’s listing six months ago. The two companies are the only San Francisco-based businesses to go public since the end of 2021, highlighting the region’s enduring appeal as a hub for innovative technology companies seeking public investment.
As Reddit embarks on its journey as a publicly-traded company, investors will closely monitor its ability to capitalize on its user growth, monetization strategies, and potential to disrupt the social media industry further. The company’s successful debut has set the stage for an exciting chapter in its evolution, with the market eagerly awaiting its plans to leverage its newfound capital and public profile.
