Shares of Reddit soared nearly 50 percent as the social media platform made its long-awaited stock market debut.
Investors pushed Reddit’s value close to $9bn after it began trading on the New York Stock Exchange on Thursday, with the company’s share price peaking at $57.80 before closing at $50.44.
Reddit, founded in 2005 by entrepreneurs Steve Huffman and Alexis Ohanian, had priced its initial public offering (IPO) at $34 a share.
The strong market debut makes Reddit’s IPO one of the biggest by a social media company so far, although the platform’s market value is dwarfed by rivals such as Meta, the owner of Facebook and Instagram, which is priced at $1.2 trillion.
Reddit’s hot launch also bucks the recent trend of waning enthusiasm for tech IPOs after underwhelming debuts by Arm, Instacart and Klaviyo.
San Francisco-based Reddit previously filed for an IPO at the height of the tech stock boom in 2021 but delayed the move after the market cooled.
Reddit’s IPO will test the company’s ability to find a viable business model after a tumultuous 20-year history marked by continuous losses and management upheaval.
Despite boasting more than 70 million daily users, the platform has yet to turn a profit and has racked up losses totalling $717m.
Reddit chief executive Huffman said shortly after the platform’s market debut on Thursday that its advertising business was showing “a lot of momentum” and there was “really no constraint” on how big it could be.
“What’s special about Reddit is whatever you’re into, whatever you’re going through, whether you’re getting into college, getting your first job, relationships, ups and downs, whatever health malady you have, and everybody’s got one, it’s all on Reddit,” Huffman told CNBC.
“And so, Reddit is all about context and interests. So, literally, every brand’s customers are on Reddit somewhere.”
Reddit’s notable investors include OpenAI CEO Sam Altman, who owns 12.2 million shares, according to IPO disclosures.
