Reddit prices IPO shares at $34 in what Wall Street hopes will reignite the frozen market for newly public tech companies

Reddit is the first social media company to go public since Pinterest in 2019, and shares surged in the first day of trading. Despite a pullback on Friday, the company has investors bullish #reddit #s… Reddit said it’s in the early stages of allowing third parties to license access to data on the platform, including to train artificial intelligence models. The company said that in January it entered into data licensing arrangements with an aggregate contract value of $203 million and terms ranging from two to three years. It expects a minimum of $66.4 million of revenue from those agreements this year, according to the filings.

  1. Reddit’s ownership was also complicated, and its technology was lagging behind competitors.
  2. Meanwhile, the business posted a net loss of $90.8 million — down from a loss of $158.6 million in 2022.
  3. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM.
  4. The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filings.

Reddit had its initial public offering (IPO) and began trading on the stock market this morning, and shot higher out of the gate. The company had priced its stock at $34 per share, but the stock actually began trading at roughly $47 per share and reached as high as $57.80 earlier in today’s session. At its peak, the company’s stock had been up 70% from its IPO price. Reddit stock’s much-anticipated public debut has finally arrived, and it’s been a big success for the company. The social-networking site raised roughly $519 million by selling shares, and gains for the stock upon hitting the market have pushed the company’s valuation up to roughly $7.6 billion.

Reddit stock was falling back early on Friday after a spike on its first day of trading. Meanwhile, more details emerged about Microsoft’s arrangements with Inflection AI. Here are some of the major companies whose stocks moved on the week’s news. Last year, Reddit’s revenue increased 20% annually to reach $804 million. Meanwhile, the business posted a net loss of $90.8 million — down from a loss of $158.6 million in 2022. Reddit also has announced a deal with Alphabet Inc.’s Google, allowing Google’s AI products to use Reddit data to improve their technology.

Reddit Stock Falls After Post-IPO Surge, and Other Technology News Today

The company is pricing its IPO stock price at around $34 per share. Rising interest rates in 2022 and 2023 subdued what had been a hot market for initial public offerings. But IPO activity has perked up and Reddit Inc. may stoke the fire even more.

Reddit, Inc. (RDDT)

The Motley Fool has no position in any of the stocks mentioned. As the world becomes increasingly data-driven, we offer solutions that are human- and experience-focused. We expect our data advantage and intellectual property to continue to be a key element in the training of future LLMs.

About 8% of the IPO shares are being set aside for Reddit users and moderators who created accounts before Jan. 1, as well as some board members and friends and family of some employees and directors. Those shares won’t be subject to a lockup, meaning the owners can sell them on the opening day of trading, according to Reddit’s filings. Bloomberg News reported earlier Wednesday that Reddit and its shareholders were expecting the IPO to price at or above the top of the marketed range. The pricing of the shares was reported earlier by the Wall Street Journal.

That includes Class B shares that will have 10 votes each compared with one each for the Class A shares to be sold in the IPO, the filings show. Reddit co-founder and Chief Executive Officer Steve Huffman said in a signed letter included in the filings that the company has many opportunities to grow both the platform and the business. Reddit said its millions of loyal users and moderators pose risks as well as a benefit for the company. Redditors have a historically combative relationship with the site, launching revolts over everything from racism on the platform to executives’ staffing decisions.

Great Time for Reddit to IPO: r/WallStreetBets Moderator

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He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. Reddit has a large and highly engaged user base, but it’s struggled with monetization in the past.

If the company can leverage data licensing as a major new revenue source, shares could surge above current levels. During a leadership crisis in 2015, Reddit asked Steve Huffman, one of its founders, to return to run the social media platform. The site, a throwback to an earlier era of social media, is poised to go public as soon as next week. Like many other social-media companies, Reddit’s core business revolves around advertising. But the company is looking to expand other monetization channels. As stated in the S-1 filing that the company made ahead of its public debut, Reddit is looking to lean more heavily on turning its network into a development and content-creation platform.

After Mr. Huffman returned, the company’s revenues climbed to more than $800 million a year from $12 million, and its employees to 2,000 from 80. Last June, when he increased fees for independent their copyrighted creations developers who used Reddit’s data, many moderators on the site revolted by shutting down sections of the platform. And questions have swirled about the company’s role in spreading misinformation.

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