Social media platform Reddit's shares ended their first day of trading in New York up 48%, suggesting that investor appetite for initial public offerings of promising yet loss-making companies could be returning.
"At the core we are a growth company. Achieving our mission means that we want to grow users and community," said Jen Wong, Chief Operations Officer at Reddit. Reddit's entry into public markets has been a long time coming. It confidentially filed for an IPO in December 2021, but a stock rout caused by Russia's war in Ukraine and the Federal Reserve's hiking of interest rates froze much of the IPO market and pushed it to delay.
Reddit's popularity rose to new heights during the"meme-stock" saga of 2021 in which a group of retail investors collaborated on its forum"wallstreetbets" to buy shares of highly shorted companies like GameStop. But the move is fraught with risks, analysts have said. Typically shut out of bidding in an IPO, retail traders eager to gain exposure to a newly-listed company buy shares only when they start trading.