WallStreetBets
Ticker RDDT began trading on the New York Stock Exchange yesterday, as Reddit became the first social media platform to go public since Pinterest in 2019, with investors aggressively upvoting Reddit’s shares, which closed 48% above the initial offering price.
Investors presumably see potential in the company, which currently monetizes its users at a fraction of what industry giant Meta achieves. Last quarter, Meta reported making $12+ for every one of its global daily active users across its Family of Apps... while Reddit reported a more modest $3.42 of revenue per daily active user. Indeed, despite its uniquely organized communities, which should theoretically be an advertiser’s dream, Reddit is yet to turn its model into a profitable one, reporting a loss every year since its founding in 2005 (to the tune of $91 million last year).
r/training
However, Reddit might not have to rely on advertising forever. Its unique topic-focused structure has become a valuable reservoir of content and data for training AI models; in fact, the company struck a $60 million licensing deal with Google last year.
Zooming out: Yesterday’s debut values the company at ~$8 billion, smaller than peers like Snapchat ($18bn) and Pinterest ($23bn), and less than 1/100th of Meta’s valuation (nearly $1.3 trillion).
