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· Posted on
March 25, 2024

Reddit's share price jumps 48% on NYSE debut as it's snoopin' for profits

Reddit has IPO'ed on the New York Stock Exchange and ended its trading day up 48% late last week, valuing the company at almost $13.7 billion.

What's the key learning?

  • This major debut is after Reddit announced that it was looking to cash in on the AI boom.
  • A platform like Reddit is tempting for AI companies, which need access to lots of up-to-date data to teach their AI models.
  • Last month, Reddit announced a $60 million USD deal to help train Google's AI tools, which could lead to a new revenue stream for Reddit.

👉 Background: Reddit is the social media site that was launched in 2005. Over the years, Reddit has raised funding from major investors, including OpenAI's CEO Sam Altman, Jared Leto, and Snoop Dog.

👉 What happened: Reddit has IPO'ed on the New York Stock Exchange and ended its trading day up 48% late last week, valuing the company at almost $13.7 billion - despite having been a loss-making company for years.  

👉 What else: This major debut is after Reddit announced that it was looking to cash in on the AI boom. Just last month, Reddit announced a $60 million USD deal to help train Google's AI tools. This could be the beginnings of whole a new revenue stream for Reddit.

What's the key learning?

💡As AI technology evolves, it has the potential to bring about a new source of revenue for media organisations.

💡As Reddit has struggled to turn a profit from ads and paid features, it's looking towards AI to change its fate. A platform like Reddit is tempting for AI companies, which need access to lots of up-to-date data to teach their AI models.

💡Reddit isn't alone in trying to monetise through AI. The New York Times is currently suing OpenAI for using its articles to train AI models without paying for them. If the New York Times wins, it could set a precedent and open up a whole new revenue stream for media companies.

‍

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