Reddit made its debut on Wall Street Thursday in an eagerly anticipated initial public offering aimed at infusing the social media company with hundreds of millions in capital.
Shares of Reddit soared as much as 54% in their first day of trading on Thursday afternoon, reaching $52.29. That’s far above the top of the $34 IPO range projected by the company.
The IPO raised about $748 million, including about $228 million for Reddit shareholders who opted to sell some of their stock. Another $519 million is earmarked for Reddit, but the San Francisco-based company won’t receive all that money because it still has to pay commissions and other costs associated with the offering.
Reddit’s public debut, while typical for a tech company seeking to raise cash to fuel its expansion, is unusual in that the platform has set aside up to 1.76 million of the 15.3 million shares being offered in the IPO for faithful users and moderators of the platform, who are volunteers. In the company’s IPO filing, CEO Steve Huffman noted that the service was built on the efforts of its community, such as moderators and users, and that Reddit wants them to be able to participate in publicly owning the business.
The interest surrounding Reddit stems largely from a large audience that religiously visits the service to discuss everything under the sun with varying levels of seriousness, from news and politics to discussions on random topics and casual conversations with like-minded people.
Despite its broad reach, Reddit has never turned a profit — piling up losses over the years totaling $717 million. That number has swollen from cumulative losses of $467 million in December 2021, when the company first filed papers to go public before aborting that attempt.
With its revived IPO, Reddit will now have the money to finance its ambitions to expand its influence and reel in more revenue in the process.
— The Associated Press contributed to this report.
