On its first day of trading, shares of the social media company Reddit were up 48%, indicating that investors may be interested again in initial public offerings of companies that have lost money but show promise.
Share prices of the San Francisco-based company opened on the New York Stock Exchange at $47 on Thursday after pricing at $34 in the IPO. The day ended with shares trade at $50.44.
Reddit itself hasn’t turned an annual profit since the company debuted in 2005, but it may be attracting investors by framing its content as possible training opportunities for artificial intelligence software. Just last year, Reddit and Google closed a $60 million data licensing deal.
Reddit’s revenue mostly comes from advertising, but the company featured AI prominently as an area for growth in its IPO marketing roadshow. “At the core, we are a growth company,” said Jen Wong, Reddit’s Chief Operations Officer. “Achieving our mission means that we want to grow users and community.”
