Social media platform Reddit (RDDT), which made its debut on the New York Stock Exchange (NSE) on Thursday, debuted at $47 per share. The company had kept its price at $34 per share, while the share closed at $50.44 per share. This was a 48 per cent jump from the IPO price.
After the company began trading, investors valued the company at close to $9 billion, according to the AP. This was one of the biggest IPOs of a social media platform, reports the BBC.
Reddit intends to raise $748 million through the IPO. The interest in Reddit lies in its loyal user base. The platform provides a free space where audiences can discuss anything, starting from gaming, business, sports, life-related queries, and literally anything. No wonder it has the tagline, “Dive into Anything.”
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Users are even discussing the IPO on the platform, with one user with the user name r/OutOfTheLoop asking, “What's going on with Reddit's IPO that came into effect today? I don't understand stocks well; are they selling the website? What will change?”
Many users are pretty skeptical of the IPO. One user with the user name AuthorNathanHGreen wrote on Reddit, “Reddit has never turned a profit, and the only way I see it starting to make money would involve degrading the user experience directly and significantly (and it already has a pretty marginal user experience).”
As per a regulatory disclosure, the platform had around 76 million users in December. Simultaneously, the company set aside around 1.76 million (out of 15.5 million) shares for its users in the IPO.
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Despite its broad base, the company never made a profit. In December, when the company was filing for IPO, it had a cumulative loss of $467 million.
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