When is a Reddit Stock IPO coming? Reddit IPO’d on March 21, 2024, on the NYSE under ticker RDDT. They’re a popular site on the internet. And one that has recently changed the trading game. They’ve given retail traders more power than ever.
If you follow the stock market, you have probably at least heard of Reddit after 2021. Reddit was an important player in a certain short squeeze that took place earlier this year. It’s also an important tool for many retail investors in an age where social media has played a key role in the financial world.
Is Reddit Publicly Traded?
Reddit does trade on the stock market under NYSE: RDDT. Before January of 2021, everyone knew what Reddit was, but probably did not quite know the power behind it. The short squeeze event of stocks like GameStop (NYSE: GME) and AMC (NYSE: AMC) was led by retail investors.
These investors discussed their ideas on subreddits like r/WallStreetBets and beat Wall Street at its own game. The influence of social media and social sentiment is replacing traditional stock research. Rather than reading financial reports on a company, traders are more likely to get intel from a site like Chatterquant, which provides real-time social media sentiment for stocks and cryptocurrencies.
It is a new age of investing and one where traders are not afraid to take on risk. New traders will unthinkingly follow things they see on Reddit, and some discussion boards even flaunt major financial losses. The very psychology of traders has changed, and sites like Reddit have been empowering this change. For better or for worse, the world of investing in the stock market has been altered forever.
Reddit Company Overview
Reddit is a social media platform unlike any other. It is equal parts news aggregation, discussion boards, and content submission. The site is widely seen as a place where users can openly discuss problems or issues that occur in everyday life. At this point, there is a subreddit built for every topic under the sun.
Reddit was founded back in 2005 by Alexis Ohanian, Steve Huffman, and the late Aaron Swartz. After several years, the team sold Reddit to Conde Nast Publications but later returned to leadership roles in 2014.
Much of Reddit’s growth can be attributed to its return, including a brighter layout and the addition of ad revenue. In 2020, Alexis Ohanian stepped away from the company due to the ongoing protests over the murder of George Floyd. He asked to be replaced by a ‘black candidate’, which he was. When asked why he stepped away, Ohanian cited his two-year-old daughter and his African American wife, Tennis star Serena Williams, as his main motivations.
Reddit has shown some nice growth over the years. The platform continues to add users in each sequential year, with 2021 hitting over 50 million daily active users.
While that does seem impressive, keep in mind Facebook sees nearly 2 billion daily active users and Twitter sees over 200 million. When you compare it with the big boys, Reddit still has a ways to go.
But being a publicly traded company adds an injection of capital for the company that it likely wouldn’t have seen from private investors.
Can Reddit utilize this and grow its company even more? As an investor, I would definitely like to see some evolution of the platform into something more than just a giant discussion board.
However, we’re still waiting on a Reddit stock IPO. So while we wait, let’s look at comparable stocks we can trade in the social media sector.
Public Social Media Companies to Consider
Meta Platforms (NASDAQ: META)
Facebook, or Meta Platforms as it is now known, is always a very interesting company to look at. It is the most polarizing brand in the world. Facebook is, at the same time, one of the most successful companies and one of the most despised. But as far as social media goes, nobody does it better. Meta Platforms owns Facebook, Instagram, and WhatsApp.
As you can probably tell from the name change, the company is rapidly moving into the Metaverse industry. Meta Platforms is attempting to revolutionize the internet as we know it and has the inside track to being the industry leader for decades to come.
Snap Inc (NYSE: SNAP)
More commonly known as its platform name, Snapchat, Snap Inc. is a social media app that uses video clips and augmented reality technology. Snap has reported seeing daily active use figures in the area of 300 million as of 2021. The platform has seen increased competition from other apps, including China-based TikTok.
Unfortunately for Snap investors, 2021 was not an ideal year for the stock. Snap was one of the first casualties of the new security updates from iOS on Apple devices. This led to a drop in ad revenues, and the stock has not been able to recover. Shares of Snap fell by 31% in the back half of the year and have been nearly cut in half from the 52-week high price of $83.34.
Buzzfeed (NASDAQ: BZFD)
A relative newcomer to the public markets, Buzzfeed went public in early December of 2021. Unlike Reddit, Buzzfeed chose to go public via a SPAC merger, and the stock has performed poorly in its first month of trading. Shares have fallen 46% in the past month, and the hope is that its performance does not have a negative effect on future media brand debuts.
Buzzfeed and Reddit aren’t the same thing, but they are both sites where people head for news and information. Buzzfeed should definitely not be mentioned in the same sentence as a company like Meta Platforms or even Twitter or Snap.
