Reddit IPO first day pop

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Reddit's initial public offering (IPO) saw a significant first-day pop, with shares rising 48% on their first day of trading. The company's shares began trading on the New York Stock Exchange under the ticker symbol "RDDT" at approximately 1:15 p.m. ET on Thursday, March 21, 2024. The initial offering price was set at $34 per share, which valued Reddit at $6.4 billion, below its previous private valuation of $10 billion. However, shares opened at $47 and climbed as high as $57.80 apiece, which is up 70%, before closing at $50.44 during regular trading. This closing price put Reddit's market capitalization at about $9.5 billion. Through the IPO, Reddit raised $519 million. The company sold a total of 22 million shares of Class A common stock in the offering, with 15.28 million sold by Reddit and 6.72 million by existing shareholders. Reddit also granted underwriters a 30-day option to purchase up to an additional 3.3 million shares of stock at the IPO price. Reddit's CEO, Steve Huffman, mentioned that the process of becoming a public company has improved the company, stating, "We're shipping better products, faster." Despite the successful first day, there were concerns about Reddit's profitability, as the company is growing but remains unprofitable. It has also faced questions about the strength of its advertising and data-licensing businesses. In a unique move, Reddit reserved a portion of its IPO shares for its moderators and other power users, offering up to 1.76 million shares (8% of the shares in the IPO) at the $34/share price through a directed share program. For the fiscal year 2023, Reddit reported revenue of $804.0 million, which was a 21% increase year over year, and a net loss of $90.8 million, compared with a $158.6 million loss the previous year. The company also disclosed AI data-licensing deals that are expected to total $203 million with terms ranging from 2-3 years.
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