Reddit makes grand NYSE debut; shares jump 48%: Everything you need to know

Social media platform Reddit announced on Thursday, March 21, that it has made its debut in the New York Stock Exchange (NYSE) under the symbol RDDT, with a valuation of $6.4B. 

Steve Huffman, Reddit’s CEO, told CNBC before the company’s debut that “the best investors of Reddit are people who use Reddit”.

Skyrocketed 48%

Reddit priced its share at $34 per share and it has skyrocketed 48 per cent to $50.4 per share at closing. However, the stock peaked at $57.80 a share, up 70 per cent, before dropping to $50.44. 

Reddit and selling shareholders raised about $748M from the offering, with the company collecting about $519M.

Allocated 2M shares to loyal users and moderators

The company has allocated around 2M shares to the site’s loyal users and moderators without any lock-up, which means they can sell the shares immediately. 

The announcement comes a day after Astera Labs’ shares surged 72 per cent on NASDAQ, giving it a capitalisation of $9.6B. The stock opened at $52.56 per share and reached a high of $63.50, closing at $60.88, up 69% from its IPO price of $36 per share.

Delayed IPO

Based out of San Francisco, Reddit’s IPO had been in the works for over two years. A couple of years back, the social media platform filed for an IPO in December 2021 confidentially; however, the plan was delayed due to stock market turmoil. 

In 2021, Reddit was valued at around $10B. 

Josh White, assistant professor of finance at Vanderbilt University, said Reddit’s IPO showed investors were willing to ignore the company’s losses because of its potential growth – a trend not seen for at least three years.

“We don’t get many large tech IPOs. Those tend to be very popular because it’s hard to buy that kind of growth,” White said.

No profit yet

According to its prospectus, Reddit’s sales for 2023 increased by 20 per cent, from $666.7M to $804M. The company’s net loss in 2023 was $90.8M, which is an improvement from its 2022 net loss of $158.6M. Despite operating for decades, the company has never turned a profit.

Founded in 2005

Reddit was ounded in 2005 by Steve Huffman and Alexis Ohanian. 

The platform functions as a vast network of communities where users can share news, and content, and participate in discussions on a wide range of topics. 

The site operates through user-generated content, with registered members able to submit text posts, images, and other media to various communities, known as “subreddits.” 

These subreddits cover diverse interests, from technology and politics to hobbies and entertainment.

Acquired by Condé Nast

In 2006, Reddit was acquired by Condé Nast, an American mass media company for $10M. 

Under Condé Nast’s ownership, Reddit continued to grow in popularity and influence, becoming one of the most visited websites.

In 2011, Reddit was spun off as an independent entity from Condé Nast, with Advance Publications, Condé Nast’s parent company, remaining the majority shareholder. 

Valued $10B

In 2014, Reddit announced a $50M fundraising round led by venture capital firm Andreessen Horowitz. In September 2021, Reddit announced that it had raised $410M in a Series F funding round, valuing the company at $10M.

One of the influential platform

Since its inception, Reddit has faced various controversies and challenges, including issues related to hate speech, misinformation, and community management. 

However, it remains one of the largest and most influential online communities to date. 

About 76 million users joined one of Reddit’s 100,000 communities in December. This data was disclosed before the company went public in San Francisco.