Reddit IPO: The San Francisco-based company’s shares began trading at $47 on the New York Stock Exchange.
Reddit’s shares rose 48% on their first day of trading. The company touted AI as a growth area during its IPO marketing roadshow, and the US Federal Trade Commission is investigating its AI data licensing deals, according to a statement released last week.
Jen Wong, Chief Operations Officer at Reddit, said, “At the core, we area growth company. Achieving our mission means that we want to grow users and community.”
Reddit’s initial public offering is valued at $6.4 billion
The San Francisco-based company’s shares opened at $47 on the New York Stock Exchange, up from $34 in the IPO, which was the upper limit of the company’s indicated price range. The shares closed at $50.44.
The company’s initial public offering is valued at $6.4 billion, with the company and its selling shareholders raising $748 million. The company was valued at $10 billion in a private fundraising round in 2021 and its entry into the public market has been a long time coming. Reddit had previously confidentially filed for an IPO in December 2021, but a stock market crash froze much of the IPO market, forcing it to postpone.
Josh White, an assistant professor of finance at Vanderbilt University, said Reddit’s IPO demonstrated that investors were willing to overlook the company’s losses.
“We don’t get many large tech IPOs. Those tend to be very popular because it’s hard to buy that kind of growth,” Josh White told Reuters.
Reena Aggarwal, director of Georgetown University’s Psaros Center for Financial Markets and Policy, stated, “The real news is going to be after the first earnings call – where are they headed, what are the results looking like, and what changes are they going to make.”