A year of upheaval that gave Reddit more control over what CEO Steve Huffman has called a “vast corpus” of valuable data that can be used to train AI has led the company to decide to go public, seeking a $6.5 billion valuation.
Trading on Reddit (RDDT) is now officially open. Reddit and selling shareholders raised roughly $750 million from the IPO, according to CNBC.
The 19-year-old website is currently pursuing business growth through “advertising, monetizing commerce on the platform, and licensing data,” and with a share price of $48, it has a market cap of $7.6 billion.
After pricing at $34 during the IPO (initial public offering), the top of the company’s stated price range, shares of the San Francisco-based startup began trading at $47 on the New York Stock Exchange on Thursday. At $50.44, they closed the trade.
Reddit has set aside 8% of the available shares for eligible users and moderators, specific board members, and friends and family of staff members and directors as part of their user reward program.
Reddit was valued at approximately $6.4 billion after it and its existing shareholders sold 22 million shares for $34 each.
Through its IPO, Reddit raised $519.4 million in gross proceeds.
Prominent contributors have also been drawn to Reddit because of its potential for financial gain. One such supporter is Sam Altman, CEO of OpenAI, who became one of the company’s largest shareholders after making an early investment.
Based on Reddit’s IPO disclosures, Sam Altman is the owner of 12.2 million shares of the company’s stock.
Academy Award-winning actor Jared Leto, Rapper Snoop Dogg, and PayPal Co-Founder Peter Thiel were among the other early investors in Reddit. Prior to the IPO, none of them were listed as the largest shareholders of Reddit.
In 2005, Aaron Swartz, Steve Huffman and Alexis Ohanian from the University of Virginia founded Reddit.
Steve Huffman is a web developer and business owner from America. He is the CEO and Co-Founder of Reddit, a social news and discussion website that is ranked among the top 20 websites worldwide.
Reddit is a social news aggregator, forum, and content rating network based in the United States. Members of the site, known as “Redditors,” register and post links, text posts, images, and videos. Other users then vote these submissions up or down. Posts are arranged into user-made boards known as “communities” or “subreddits” according to their subjects.
Reddit is the 18th most popular website in the world as of October 2023. The United States accounts for 48.98% of website traffic, followed by the United Kingdom at 7.06% and Canada at 6.9%, according to Similarweb data.
Reddit has lost money annually since its launch in 2005, despite the devotion of a large portion of its user base, and it has not kept up with the commercial success of its peers, like Meta Platforms & X.
An estimated 73.1 million “uniques” or users who used Reddit every day were active on the site.
For instant access to that data, for instance, Google recently struck a $60 million annual deal with Reddit.
Google will use Google AI to power Reddit’s search function and get real-time access to Reddit’s data through a supposedly $60 million annual deal.
As part of their recent collaboration, Reddit is providing Google with AI training data. Reddit said in an update on Thursday that it will begin offering Google “more efficient ways to train models.”
According to co-founder and CEO Steve Huffman, its 100,000 online forums, or “subreddits,” facilitate discussions on a wide range of subjects, from “the sublime to the ridiculous, the trivial to the existential, the comic to the serious.” Reddit has had a large user base in its journey since 2005, and now after releasing the company’s IPO and its recent partnership with Google AI will help it to become a more profitable website.
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