In an interview on the New York Stock Exchange trading floor ahead of Reddit’s market debut on Thursday, chief executive Steve Huffman acknowledged that the mischievous retail investors that congregate on the social media platform might deliberately drive down its share price.
“It’s a free market!” he said.
For Reddit, as for Huffman, the bet on a public offering for a site he described as a “fun and special, but sometimes crazy place” has appeared to pay off.
Shares of the social media company soared on its Big Board debut under the ticker RDDT, closing at $50.44, or 48 per cent above its IPO price. This brought its fully diluted market capitalisation to $9.5bn, close to where the company was last valued privately at $10bn in 2021.
Reddit’s journey to public markets marks a turning point for a fringe, free speech-oriented platform dominated by esoteric memes, sardonic humour and gamers, as it transforms itself into a more mainstream discussion hub that enforces stricter moderation rules in order to attract advertising dollars.
The picture for its earlier investors was mixed. One big winner was the Newhouse family, who through Advance Magazine Publishers Inc own Condé Nast, which bought Reddit in 2006 for $10mn before spinning it out in 2011. Its shares are now worth about $2.1bn, a handsome windfall to their publishing empire, which also includes Vanity Fair, the New Yorker and Vogue. Entities affiliated with OpenAI chief executive Sam Altman now hold a stake worth $613mn.
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