The eagerly anticipated Reddit initial public offering (IPO) did not disappoint. The social media outfit priced its shares at $34 and launched its IPO on the NYSE on 21 March 2024 under the RDDT ticker.
Reddit Debuts with a Boom as Stock Jumps 48% on First Day of Trading
Trading kicked off at $47 per share and shot up to $57.80, a 70% spike, during the day. The company and its shareholders raised an estimated $750m, with Reddit pocketing approximately $519m. Its current market cap sits at $9.5bn. The success of the IPO at this price appears to back up the company’s decision to lower its valuation after it received a $10bn valuation during private fundraising a few years ago.
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Tech IPOs have attracted little investor interest since the 2021 upsurge. Reddit’s success follows hot on the heels of Astera Labs (ALAB), which might signal a turnaround and piqued interest in artificial intelligence. ALAB stock soared by 72% on its first day of trading. The RDDT debut is the first since Pinterest (PINS) went public in 2019. In 2023, other tech market debuts, such as Klaviyo, Inc. (KVYO), did not impress.
More worryingly, RDDT has confirmed that the US Federal Trade Commission is investigating its sale and sharing of user data with third parties looking to train their AI models. This came after it was revealed that a $66m contract had been signed with Alphabet’s Google (GOOG) for this reason.
