Reddit IPO: Stock jumps on first day as a public company CNN Business

The company also is hoping to bring in more money by licensing access to its content in deals similar to the $60 million that Google recently struck to help train its artificial intelligence models. That ambition, though, faced an almost immediate challenge when the U.S. Reddit and its eclectic bazaar of online communities is ready to plumb high-stakes territory—the stock market. Reddit is going public, seeking a $6.5 billion valuation after a year of upheaval that gave it more control over what CEO Steve Huffman has called a “vast corpus” of valuable data that can be used to train AI. As an example, Google recently cut a deal with Reddit worth a reported $60 million per year for real-time access to that data. On Wednesday, Reddit euro hungarian forint exchange rate history revealed that it had priced its shares at $34 each, near the top of a marketed range.

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Like other social media stocks, the company leverages its spaces to earn revenue from digital advertising, its largest revenue source. It also earns revenue from premium subscriptions and data licensing. These sources should foster company growth as more users turn to the site. Short interest in GameStop surged toward the end of the year, as investors bet against the company’s earnings potential. With a mega short-squeeze taking place, short-sellers began to hedge their bets, buying more stock to make up for their mounting losses. Reddit’s strong IPO debut, following directly in the wake of Astera’s blockbuster public offering, could shake up the current market dynamics and narrative surrounding going public.

Will the IPO window genuinely open?

Even though stock market downturns are normal and inevitable, perspective demonstrates just how powerful patience can be for long-term investors. On the other hand, the average S&P 500 bull market over 94 years has endured for 1,011 calendar days, which equates to around two years and nine months. Including the current bull market rally, just over half (14 out of 27) of all bull markets for the S&P 500 have lasted longer than the lengthiest bear market. Over shorter time frames, predicting what the U.S. economy or stock market will do can be tricky, if not downright impossible.

The company also is hoping to bring in more money by licensing access to its content in deals similar to the $60 million that Google recently struck to help train its artificial intelligence models. That ambition, though, faced an almost immediate challenge when the U.S. Reddit outlined a strategy in its filing calling for even Cloud Technology training more ad sales on a service that it believes companies will be a powerful marketing magnet because so many people search for product recommendations there. Those efforts, mostly centered around selling ads, have helped the social platform increase its annual revenue from $229 million in 2020 to $804 million last year. But the San Francisco-based company also posted combined losses of $436 million from 2020 through 2023.

1. And that’s big considering it makes most of its money from showing ads to people using its platform.
2. But while Walmart stock has been looking more attractive lately, it’s not cheap.
3. Although his founder’s letter leading up to this IPO didn’t mention it, Huffman touched upon the company’s past turmoil in another missive included in a December 2021 filing attempt that was subsequently canceled.
4. The GameStop frenzy on Wall Street has investors, and much of the internet, enraptured — not unlike a good horror movie.
5. Meanwhile, the Dow Jones, S&P 500, and Nasdaq Composite entered respective bear markets in 2022.
6. Last year, Reddit’s revenue increased 20% annually to reach $804 million.

Users had until March 5 to pre-register to buy shares in the listing; those who did will have the chance to opt out of purchasing shares now that they have been priced. The company also said it now has, on average, more than 73 million daily active users, as of the final three months of 2023, up from the 52 million daily active users it reported in 2021. Reddit, along with some existing stockholders, plans to offer 22 million shares of the company’s Class A stock, meaning the IPO could raise as much as $748 million from those shares, according to an updated prospectus. If the IPO does open under current market conditions, there’s reason to expect the situation to hold, or even improve as the year continues. The Nasdaq Composite reached a new 52-week high today, with the index peaking at a higher maximum than it did back in 2021. That means that tech shares are, by one metric, as valuable as they have ever been.

No Pump & Dumps/Low Volume Stocks

“If we fail to increase or retain our user base or if user engagement declines, our business… and prospects will be harmed,” it said in the filing. For one thing, the social media platform is facing increased scrutiny from regulators. Meanwhile, the smaller category of “other revenue” soared 547% higher.

Perhaps most significant of all is that Reddit’s filing with the US financial markets regulator, the Securities and Exchange Commission (SEC), notes its users as a potential risk that comes with owning shares in the company. Reddit’s moneymaking potential also has attracted some prominent supporters, including OpenAI CEO Sam Altman, who accumulated a stake as an early investor that has made him one of the company’s biggest shareholders. Altman owns 12.2 million shares of Reddit stock, according to the company’s IPO disclosures. When Reddit’s price initially jumped, she explained, some investors who got an allocation may have sold their shares to cash for those of you that trade “28 pairs” in on the gains, bringing it back down. The news aggregator and social forum operator reported fantastic results in the third quarter of 2024, lighting a fire under the stock. Share prices rose as much as 43.1% on the news, settling down to a slightly milder 40% gain by noon ET.

It is an online forum where users can discuss topics that interest them. As of the end of December 2023 it had more than 73 million users, according to the company. By the close of trade on Thursday its shares stood at $50.44, valuing the firm at more than $9bn (£7.1bn). Although his founder’s letter leading up to this IPO didn’t mention it, Huffman touched upon the company’s past turmoil in another missive included in a December 2021 filing attempt that was subsequently canceled. Reddit disclosed last week that the US Federal Trade Commission is looking into its plans to license data to AI firms, although the company said it does not believe it has violated US consumer protection law. Many people think of chatbots as a new form of internet search — rather than use a search engine to go to a website, chatbots summarize online information into a succinct answer.

Here’s how Reddit plans to price shares when it goes public

All told, the stock has gained 146% since joining the public stock market seven months ago. Nonetheless, most of that spending occurred in the first quarter as stock-based compensation increased around the time of the IPO. With that expense largely in the past, Reddit earned a net income of $30 million in the third quarter, indicating its financial picture is better than the nine-month financials might imply.