Reddit priced its initial public offering at $34 per share, the high end of its expected range, valuing the social media platform at about $6.4 billion.
As of 11:50 a.m. ET Thursday, the stock is indicated to open between $44 and $48 per share.
The company's listing on the New York Stock Exchange was highly anticipated, given that its listing has been stagnant for the past two years. Reddit is the first major social media company to go public since Pinterest (PINS) in 2019.
The user-generated discussion-style platform has been around since 2005, but gained recognition during 2021's meme craze. At the time, retail traders on the subreddit WallStreetBets encouraged short selling of video game retailer GameStop (GME) stock. Theater Chain (AMC) and other heavily shorted stocks.
The IPO is expected to gauge investor appetite for tech-related products amid tight monetary policy.
Reddit's 2023 revenue rose about 20% from the previous year to $804 million, according to the company's S-1 filing. About 98% of its revenue in the third quarter of last year came from advertising on the platform.
The company is not profitable, but its net loss narrowed from $158.6 million in 2022 to $90.8 million last year.
According to the S-1 filing, the site had 500 million monthly visitors in December 2023, and averaged 73.1 million daily unique active users in the three months ending in December.
Reddit's filing also notes that the company sees opportunities to license data for AI use.
“On the data side, we have about 20 years of human conversations about everything. In an AI world, everything is increasingly being written by AI, and the value of human-generated content is increasing over time. It’s actually increased over time,” Reddit co-founder and CEO Steve Huffman said in an interview with Yahoo Finance’s Brian Sozzi on Thursday ahead of the listing.
In honor of Redditors, the company has set aside 1.76 million shares with no lockup period for sale to eligible users and moderators on the platform.
Headline venture partner Kamran Ansari told Yahoo Finance in a recent interview that the move is likely to lead to volatility.
“We may see significant rises and falls in stock prices,” he said. “There's such a passionate community around Reddit users that we could see Reddit itself become a meme stock, ironically like AMC or GameStop.”
Ines is a senior business reporter at Yahoo Finance. Follow her on X @ines_ferre
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