Reddit’s shares increased 48% on the company’s first day of trading on the New York Stock Exchange, highlighting investors interest in the popular social media platform despite its fledgling revenue.
Reddit marks the first IPO for a social media company since Pinterest in 2019.
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The social media platform, which first launched 20 years ago, has not turned an annual profit since its launch in 2005. However, the company piqued investors’ interest by priming its content, made up of millions of forums, as a training bin for AI programmes.
Reddit reportedly signed an AI licensing partnership with Google in February worth around $60m annually.
“At the core we are a growth company. Achieving our mission means that we want to grow users and community,” Reddit COO Jen Wong said.
Like other social media platforms, Reddit is still heavily relying on advertisement for its revenue, but the company said AI is going to be its targeted area of growth.
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By GlobalDataNoting the AI agreement with Google, Reddit co-founder and CEO Steve Huffman previously said: “Reddit’s vast and unmatched archive of real, timely and relevant human conversation on literally any topic is an invaluable dataset for a variety of purposes, including search, AI training and research.”
