The shares of social media giant Reddit (NYSE:RDDT) will start trading today in what many see as the biggest initial public offering (IPO) of the year. The IPO of RDDT stock, which will trade on the New York Stock Exchange, was priced yesterday at $34 per share.
Here are seven other things that investors should know about the Reddit IPO, the company itself and the firm’s financial performance.
- Reddit has raised $519 million from the IPO, which gives the firm a valuation of nearly $6.5 billion.
- The firm was valued at $10 billion three years ago, so it, like many other companies viewed as somewhat risky, is less valuable than it was in 2021, according to the market.
- According to investment bank Bernstein, “Reddit’s revenue per full-time-equivalent employee is 50%” below that of Snap (NYSE:SNAP) and Pinterest (NYSE:PINS). The same metric is reportedly 80% higher at Meta (NASDAQ:META) than at Reddit.
- Reddit, like Meta, Snap, and Pinterest, generates most of its revenue through advertising.
- Reddit’s top line rose 21% last year to $804 million, but it generated a net loss of $90.8 million.
- Last quarter, the firm had 73.1 million daily active unique users.
- CEO Steve Huffman’s total compensation came in at $193 million in 2023, and he owns roughly 3.2% of RDDT stock.
RDDT Stock: Reddit Under the AI Data Sharing Spotlight
Earlier this month, the firm reported that the Federal Trade Commission (FTC) is probing its practice of providing data to other companies. The data is being used to create artificial intelligence (AI) systems.
Reddit is providing data to Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), which the search engine giant is using to enhance its AI offerings.
There has been some speculation that Reddit could become a “meme stock” following the Reddit IPO.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
