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Reddit (RDDT) gained a whopping 70% as it debuted on the New York Stock Exchange on Thursday – signalling strong appetite for new tech stocks.

Reddit is now worth over $10 billion

The social media company priced its initial public offering at $34 per share on Wednesday that valued it at about $6.4 billion.

Following the price surge, however, $RDDT is now worth more than $10 billion – a valuation it had commanded as a private company in 2021.

On Thursday, Reddit also confirmed that its revenue increased 20% to $804 million in 2023. The San Francisco-headquartered firm remained in $91 million loss last year – but that was also materially narrower than $158.6 million in 2022.

Note that Sam Altman of OpenAI is a major RDDT shareholder. He had a stake in it worth more than $400 million before the debut.

Reddit stock is expensive versus peers

The $6.4 billion IPO valuation translated to a price-to-sales multiple of around 8 for the New York listed firm.

In comparison, its rivals like Meta and Alphabet trade at 9.7 times and 6.1 times – while Snap and Pinterest have a price-to-sales ratio of 3.9 and 7.5, respectively. Reddit also said on Thursday:

$RDDT has entered certain data licensing arrangements with an aggregate contract value of $203 million and terms ranging from two to three years.

Reddit expects over $66 million in revenue from its data licensing agreements this year. Google also doubled down on its partnership with the social media company recently to gain access to more data to train its AI models.

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