Reddit Makes High-Profile Market Debut on NYSE

Social media giant Reddit made its much-anticipated market debut on the New York Stock Exchange, solidifying its position as a publicly traded company. The San Francisco-based firm priced its initial public offering (IPO) at the upper end of the previously marketed range, showcasing investor confidence in the platform.

The company’s IPO valued Reddit at a significant $6.4 billion, raising a substantial $748 million for the company and its stakeholders. This move comes after over two years of planning, with the initial IPO filing in December 2021, delayed due to the stock market’s response to the Federal Reserve‘s quantitative tightening.

The high-profile debut of Reddit on the market is viewed as a critical litmus test for upcoming IPOs, with the potential to influence other companies’ decisions to go public. Julian Klymochko, from Accelerate Financial Technologies, expressed concerns that a poor trading performance by Reddit could dampen investor enthusiasm for IPOs.

The platform’s surge in popularity during the meme-stock frenzy of 2021, driven by retail investors on the ‘wallstreetbets’ forum, has propelled Reddit into the spotlight. Recognizing its user base, Reddit allocated 8% of the IPO shares to eligible users, moderators, board members, and associates, a move that has some analysts apprehensive about potential risks.

Despite its cult-like status on social media, Reddit faces stiff competition from industry giants like Meta Platforms‘ Facebook and Elon Musk‘s ventures. The company, led by CEO Steve Huffman, continues to focus on monetizing its business, aiming for profitability. Analysts underline the importance of Reddit’s post-IPO performance, particularly with regards to its future earnings calls and strategic decisions.