Following years of preparation and nearly two decades operating as a privately-held company, Reddit officially went public this week, searching for IPO success. The company had its initial public offering (IPO) on Thursday, March 21 and was subsequently listed on the New York Stock Exchange. As is tradition, Reddit’s IPO was marked by a company figure ringing the NYSE’s opening bell Thursday. It was Reddit’s affectionate mascot, Snoo, that got the honor of ringing the bell and signaling the start of Reddit’s time as RDDT on the NYSE. In the process, Reddit became the most recent social media site to go public, following Pinterest in 2019 and Snap in 2017.

Reddit hoped to sell its shares for $34 each, with the company making a total of 15.3 million shares available. If all shares sold at Reddit’s projected prices, it would generate $519.4 million for the company. Separately, private shareholders put up 6.7 million shares for purchase. Reddit’s projections and goals for the IPO would give it a market value at around $6.5 billion. But, after two whole days on the NYSE as a publicly-traded company, Reddit didn’t just meet its internal goals. It crushed them, finding success in Reddit’s IPO.

As reported by CBS News, Reddit stock prices grew 54% on Thursday after a full day of trading. The peak of Reddit’s share prices hit $52.29 in a result that greatly exceeded the company’s own goals. This meant that Reddit met its target of raising over $500 million for the company, and $748 million was generated through the IPO in total. However, some of that money went to private shareholders. Reddit’s successful IPO continued into Friday. The company traded at a stock price of $46 when the market closed on March 22.

Why Reddit found success through its IPO

Not every IPO turns out to be a success, so why did Reddit perform so well? It comes down to how the company strategically prepared for the IPO. Reddit made a couple of high-profile moves to increase revenue and make the company more valuable. Notably, it started charging for API access. More importantly, it struck an agreement with Google worth $60 million annually. Per the terms of the deal, Google can use Reddit content to help train artificial intelligence models.

In essence, Reddit’s success comes down to its user base. That’s why the company came up with the clever idea of letting users buy Reddit stock at its IPO pricing. With enough Reddit “karma,” users could have an early shot at owning a portion of the company. All of these things are just a few factors that led to a successful IPO for Reddit.

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