Shares of closed up 48% in their debut on Thursday, a day after the company raised $519 million in an IPO that priced at the top of the projected range.
The IPO is a long time coming for San Francisco-based Reddit. The company, known for its lively online communities and colorful discussion threads, was co-founded by CEO and venture investor more than 18 years ago.
Reddit鈥檚 initial public offering is being closely watched for a number of reasons. Its IPO is the first from a social media company since 鈥檚 debut in 2019. Startup investors and entrepreneurs are also hoping the IPO, which follows a prolonged drought for new tech offerings, could help kickstart the IPO market.
Certainly this has been an encouraging week for those hoping to pick up the IPO pace. A day before Reddit鈥檚 debut, , a developer of data center connectivity technology with use cases in generative AI, closed up more than 72% in first-day trading after pricing shares above the projected range.
Reddit, which is trading on under the ticker symbol RDDT, said it had an initial valuation of $6.4 billion after pricing shares at $34 each late Wednesday. Its valuation at the end of its first day of trading is around $7 billion.
Notably, in an unusual move, the company also offered 74,000 of its active moderators and users at that price point, in order to give them access to some upside should the stock increase over time. Company CFO told Axios that “tens of thousands” of Reddit users, known as Redditors, .
“We set aside 8% of the shares so that our moderators and passionate users can be owners … It’s been good to have some pop for them on Day 1 because that’s different from what’s happened with some other companies,” he said.
Media company , owner of magazine publisher among other properties, was the largest shareholder in Reddit ahead of its IPO, with a 30.1% ownership of the company, according to securities filings. Several other shareholders, including聽Chinese tech conglomerate聽 and entrepreneur and investor聽, (now CEO of also held large stakes.
鈥� Gen茅 Teare contributed to this article.
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