Social media platform Reddit (RDDT) has made its debut on the New York Stock Exchange (NSE) on Thursday. It debuted at $47 per share and had kept its price at $34 per share. As the share closed at $50.44 per share, this was a 48 per cent jump from the IPO price. According to the APA, after the company began trading, investors valued the company at close to $9 billion. This was one of the biggest IPOs of a social media platform as per the BBC.
Reddit intends on raising USD 748 million through the IPO. The main interest in Reddit lies in its loyal user base, wherein, the platform provides a free space where audiences can discuss anything, starting from gaming, business, sports, life-related queries, and literally anything. Hence, it is no surprise that Reddit’s tagline is, “Dive into Anything.”
One user with the user name r/OutOfTheLoop asked, “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?” This shows that even users are discussing the IPO on the platform itself.
However, there are many people who are skeptical of the IPO. For instance, one user with the username 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).”
Furthermore, the platform had around 76 million users in December as per a regulatory disclosure. And at the same time, the company set aside around 1.76 million (out of 15.5 million) shares for its users in the IPO simultaneously.
And regardless of its broad base, Reddit has never made a profit. To take a note, when the company was filing for Initial Public Offering, it had a cumulative loss of $467 million back in December.
