Reddit saw a 48% increase in their shares on their first day of trading, indicating a strong interest from investors and setting the stage for more tech companies to enter the stock market this year. The social media company started trading on the New York Stock Exchange at $47, up from its initial price of $34 in its IPO. The stock closed at $50.44, giving Reddit a market capitalization of around $9.5 billion.
Reddit, founded in 2005, is known for its message boards where users can discuss various topics. Despite facing challenges common to large social media firms, the company has improved significantly through the process of going public, according to CEO Steve Huffman.
This successful IPO suggests that the market is ready for more tech offerings, as demonstrated by the positive debut of other companies like Astera Labs. Some tech companies, such as Stripe, are not in a rush to go public due to valuation concerns. Reddit’s listing also tested whether it would become a meme stock, as seen through discussions on WallStreetBets subreddit.
One unique aspect of Reddit’s IPO was offering up to 8% of its shares to regular users, a move to reward loyal users. The Newhouse family, Tencent, and Sam Altman are among the major shareholders set to benefit from the IPO. Despite concerns among some users about the impact of going public on Reddit’s unique culture, Huffman reassured users that the company’s core values would remain intact.
