Reddit, a social media platform that hosts millions of online forums on topics of shared interests, debuted as a public company on the New York Stock Exchange (NYSE) in March 2024. The initial public offering valued Reddit at $6.4 billion.

The company’s IPO priced at $34 per share. On its first day of trading on NYSE, the stock price surged 48%. Reddit Class A common stock is trading under the ticker symbol “RDDT.”

In its Form S-1 registration statement filed with the Securities and Exchange Commission (SEC), Reddit emphasized artificial intelligence (AI) as an area that would propel future growth. It noted that its large archive of human conversations provides ideal training datasets for AI systems and large language models (LLMs). Reddit has entered into AI data licensing agreements with Google and other companies.

Reddit’s $6.4 billion IPO actually marks a decline from its peak valuation of $10 billion in a 2021 private fundraising round. At that time, Reddit was a widely used forum for discussing meme stock investments in companies such as GameStop. In late 2021, Reddit confidentially submitted a Form S-1 registration statement with the SEC as a first step in the IPO process. However, the downturn in global IPO markets shortly thereafter put these plans on hold.

The IPO included a Directed Share Program, which reserved 8% of the shares offered in the public offering for certain board members, Reddit content moderators, and friends and family members of employees and directors. Directed Share Programs have been a feature of a number of other IPOs, including those of Airbnb, European Wax Center and Rivian.

Founded in 2005 by Steve Huffman and Alexis Ohanian, the 19-year-old website attracts approximately 73 million daily active visitors. However, the company continues to operate at a loss. In 2023, Reddit reported a net loss of $90.8 million. In the risk factors section of its S-1 registration statement, Reddit noted that it expects operating expenses to increase in the future and that its business could be adversely impacted if its revenue growth does not outpace its operating expenses. Reddit derives a majority of its revenues from advertising.

According to Reddit’s S-1 registration statement, major shareholders of Reddit include entities affiliated with Fidelity Investments, Sam Altman, Advance Magazine Publishers, and the Chinese tech giant Tencent. Sam Altman was previously a member of Reddit’s board until 2022.

In his letter to Reddit shareholders, Co-Founder and CEO Steve Huffman stated, “We hope going public will provide meaningful benefits to our community as well. Our users have a deep sense of ownership over the communities they create on Reddit…We want this sense of ownership to be reflected in real ownership—for our users to be our owners.”

Reddit’s IPO in the first quarter of 2024 comes after a lull in IPO activity. The number of IPOs that launched in 2023 was over 40% lower than the number of IPOs that launched in 2021. After a two-year slump, IPO activity has started to pick up in 2024. Other major IPOs that debuted in 2024 include those for the cold-storage warehousing company Lineage, Inc. and the healthcare software company Waystar.