As Reddit’s IPO (RDDT) begins trading today after 19 years of existence, CEO Steve Huffman said he is confident there is a lot of momentum to keep the business’ success story on track.
Reddit (RDDT), with a $6.5B in valuation, debuted its initial public offering at $34 per share, opening today at $47, reaching a high of 60% to trade above $53. The stock is currently up 48.29%, at $50.42.
CEO Steve Huffman said that for this IPO the company reserved 8% of its shares for its active moderators, users, and retail traders to encourage them to invest. “Our goal there was to bring in people — as is the ethos of Reddit (RDDT), to level the playing field — on the same terms that professional investors would.”
Many platform investors, however, have shown disinterest in investing in Reddit (RDDT). Wildly popular subreddits r/WallStreetBets and r/stocks are bearish on the stock and have expressed eagerness to short it, calling it a “pump and dump scheme.”
The company’s S-1 filing mentioned these popular reddit forums as a risk. However, “that’s reddit,” said Huffman. “Reddit is people, [it’s a] fun and special, but sometimes crazy place, and I wouldn’t expect anything less.”
The platform has an average of 73M daily active uniques — which are individual visitors to its website — an average of about 267M weekly uniques, more than 100,000 active communities, and about 1B cumulative posts.
Its business revenue grew from $666.7M in 2022 to $804M in 2023, up 20%, and has a net loss that reduced from -$158.6M in 2022 to -$90.8M in 2023, a 43% change.
“We really started to build the business of Reddit (RDDT), and that hit high gear in 2018, when Jen Wong joined as COO,” said Huffman. “We made a profit in the back half of 2023. We grew revenue three times as fast as costs last year.”
In addition, the company’s business is 95% advertising revenue. In 2023, its ad revenue was $84M. “We had $12M in revenue in 20215, so we’re getting there.”
He added that having the company go public was “the natural thing to do,” and said that “the best investors of Reddit (RDDT) are people who use Reddit. I want our investors to be users, and I’d love our users to the investors.”
