2024-03-21 19:03:32
The action of the American social network Reddit opened up almost 40% for its first listing on the New York Stock Exchange on Thursday.
Around 6:20 p.m. GMT, the stock posted an increase of 42.94%, to $48.60, which valued the platform at around $8.6 billion.
This is the first listing of a social network on the New York Stock Exchange since Pinterest in 2019.
The operation allowed Reddit to raise a little over $500 million.
This is a turning point for the platform created in 2005 by two students from Virginia (East), considered a separate player in the world of social networks.
It is home to thousands of discussion forums on a wide range of topics, and operates largely on a voluntary basis, as moderators are not paid.
The listing of the platform was an important test for the IPO market, which has been slowing down since a surge in September 2023.
For NYSE President Lynn Martin, Reddit had “a warm reception today,” she said on CNBC.
– “A crazy place” –
Reddit claims 73 million daily active users on average and over 267 million weekly users.
But the platform has never managed to generate an annual profit.
“Profitability is an important milestone for us and we are getting closer and closer to it,” CEO Steve Huffman, co-founder who returned to the helm in 2015, said on CNBC.
Like Facebook, Instagram, the Meta group, YouTube (Google) or TikTok, its economic model is based on advertising but the income it earns from it is incommensurate with those of its major rivals.
In 2023, Reddit generated $804 million in revenue but suffered a loss of $90.8 million.
The platform also intends to grow its revenues through contracts giving access to public data on its site, very popular with artificial intelligence (AI) companies, which use it to develop their interfaces.
The social network was bought in 2006 by Condé Nast, publisher of Vogue, The New Yorker and Vanity Fair magazines.
The company became an independent subsidiary in 2011, but Advance, the controlling holding company of Condé Nast, is still the largest shareholder.
Sam Altman, boss of OpenAI – creator of the generative artificial intelligence software ChatGPT – is one of Reddit’s most important investors. He even briefly headed the social network.
The IPO sparked a wave of discontent on Reddit, particularly within the stock market forum WallStreetBets.
Dozens of people predicted, on the forum, the fall of the stock and claimed to want to contribute to it by betting on the decline, recalling that Reddit had never made a profit and accusing its boss of greed.
“Reddit is it,” Steve Huffman said in response to a question on WallStreetBets. “Reddit is people. It’s sometimes a fun and great place, and sometimes it’s also a crazy place.”
“Reddit is nothing without its users and communities,” he continued.
In June, the leader had already been criticized for abruptly raising Reddit data access prices for third-party developers.
The platform previously provided access at moderate prices, or for free, to public data on its site.
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