Reddit stock surged on its inaugural trading day, closing nearly 50% higher than its IPO price of $34 per share, at $50.44

Reddit stock surged on its inaugural trading day, closing nearly 50% higher than its IPO price of $34 per share, at $50.44. This resulted in a market capitalization just over $8 billion. The company's debut on the New York Stock Exchange was highly anticipated, marking the first major social media IPO since Pinterest (PINS) in 2019.

Established in 2005, Reddit gained widespread attention during the meme craze of 2021, notably through retail traders on the subreddit WallStreetBets promoting short squeezes on stocks like GameStop (GME) and AMC Entertainment Holdings (AMC). The IPO served as a gauge for investor interest in tech-related offerings amidst tight monetary policy.

According to Reddit's S-1 filing, its 2023 revenue increased by approximately 20% year-over-year to $804 million, with advertising accounting for 98% of third-quarter sales. The company reduced its net loss from $158.6 million in 2022 to $90.8 million in 2023. CEO Steve Huffman highlighted Reddit's profitability on an adjusted EBITDA basis in the latter half of 2023, expressing confidence in its scalable business model.

The platform boasted 500 million monthly visitors in December 2023, with an average of 73.1 million unique daily active users during the same period.