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Reddit’s shares closed at $50.44 on the first day of trading, soaring 48% from opening. The company’s initial public offering at the New York Stock Exchange marks the largest stock offering from a social media company in years.
Reddit, which is trading on the NYSE under the ticker RDDT, was valued at around $9.5 billion after closing Thursday. Private fundraising in 2021 placed the company’s value at about $10 billion.
SIGNALS
Reddit CEO one of the highest paid social media heads
Reddit’s chief executive Steve Huffman is paid more than the heads of Meta, Pinterest, and Snap combined, according to Quartz, raking in a whopping $193 million in 2023. The information was revealed in a Securities and Exchanges Commission filing last month ahead of the company’s IPO. Reddit users blasted Huffman for the massive pay package, prompting the CEO to defend himself in a video, explaining that his compensation is a combination of salary and shares. Redditors specifically pointed to the site’s reliance on unpaid moderators to handle its content: “The feel good moment of simultaneously revealing your CEO is overpaid while your risk assessment underscores the [importance] of unpaid moderators,” one user wrote. Huffman’s salary of $341,000 was bumped up to $500,000 last month.
Home of memestocks could suffer similar price swings
Reddit has pursued an IPO for years, despite early promises that it would neither run ads nor go public. But Huffman and other top company executives have rallied to take it public, with Huffman saying it was time to “grow up and behave like an adult company.” Among the site’s many subreddits is r/WallStreetBets, a page where users coordinate stock trading strategies, sometimes forcing wild swings in share prices, Wired noted. There were concerns that users could cause the same issues for Reddit ahead of the IPO: Multiple users suggested shorting RDDT shares during the launch. The company earmarked 8% of its shares for Reddit moderators and power users in an unusual move that could backfire if a significant number opt to dump their shares early on.