1. Reddit’s shares opened at $47, quickly rose to $55, and eventually stabilized around $50 after its IPO at $34 per share.
2. Reddit, with $804.0 million in 2023 revenue, is unprofitable but has a promising AI strategy with significant revenue potential from selling data to AI companies.
3. Despite an FTC inquiry into Reddit’s user data licensing for AI models, its successful IPO along with Astera’s recent public offering may signal a positive trend for tech companies going public in 2024.
Reddit’s IPO opened at $47 per share and quickly jumped to $55, showing a 60% increase from its initial price of $34 per share. The company had indicated a target range of $31 to $34 per share before settling at the top end of that interval. Despite revenue of $804 million in 2023 and net losses of over $90 million last year, Reddit has a promising AI strategy that includes selling data contracts to AI companies.
The FTC has opened an inquiry into Reddit’s plan to license user data for AI training, which could impact investor interest in the company. Following Astera’s successful IPO, Reddit’s strong debut may signal a shift in market dynamics for tech companies going public. The performance of tech IPOs in 2021 has led to hesitation among tech companies to go public, but with a positive start for Reddit, more tech companies may consider entering the market.
Despite potential challenges, such as the possibility of declining stock value after an initial public offering, the current market conditions seem favorable for tech IPOs. The Nasdaq Composite reaching a new 52-week high and positive performance from companies like Astera and Reddit may encourage more tech companies to enter the IPO market in 2024. Overall, there is hope for a resurgence in the IPO market this year.