Reddit Quickly Becomes the Day's Hottest Stock

It jumps more than 50% in IPO
By Newser Editors and Wire Services
Posted Mar 21, 2024 1:20 PM CDT
Reddit Off to Hot Start in Wall Street Debut
The Reddit logo is displayed on a mobile device.   (AP Photo/Tali Arbel, File)

Reddit soared in its Wall Street debut as investors pushed the value of the company close to $9 billion seconds after it began trading on the New York Stock Exchange. Reddit, which priced its IPO at $34 a share, debuted Thursday afternoon at $47 a share. The going price has climbed even higher since, with shares for the self-anointed "front page of the internet" soaring more than 55% in mid-afternoon trading. That would give the company a valuation of more than $10 billion, notes the Wall Street Journal.

The IPO is testing the quirky company's ability to overcome a nearly 20-year history colored by uninterrupted losses, management turmoil, and occasional user backlashes to build a sustainable business. Reddit has nearly 73 million daily users, but it has never profited from its broad reach while piling up cumulative losses of $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.

Because Thursday marks Reddit's first day on the public market, Reena Aggarwal of Georgetown University's Psaros Center for Financial Markets and Policy says the first key measure of success will boil down to the company's next earnings call. "As a public company now they have to report a lot more ... in the next earnings release," she said. "I'm sure the market will watch that carefully."

(More Reddit stories.)

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