'Meme stock mecca' Reddit surges 48% on its first day on Wall Street, closing up to 70% of its value

Reddit, a U.S. social networking company that went public on the New York Stock Exchange on November 21 (local time), soared nearly 50 percent on its first day of trading. On the New York Stock Exchange, Reddit closed its first trading session at $50.44, up 48.4 percent from its IPO price. Reddit opened at $47, 38% above its IPO price, and traded as high as $57.8 during the day. At the end of the day, Reddit's market capitalization was $9.5 billion, up $3 billion from its IPO price of $6.5 billion.

Founded in 2005, Reddit had more than 70 million daily unique visitors as of last October. Reddit's stock discussion board, WallStreetBets, is known as the go-to forum for retail investors in the U.S. to trade "meme stocks" (stocks that have gone viral online). During the GameStop crisis in 2021, retail investors led an "ant revolt" against short selling by Wall Street hedge funds, led by WallStreetBets, and the forum was dubbed the "mecca for meme stocks.

OpenAI CEO Sam Altman reportedly holds the third largest stake in the company, behind the Newhouse family's Advance (more than 30%) and China's Tencent (11%). Altman has maintained a close relationship with Reddit, leading a $50 million funding round in 2014 and serving on the company's board until 2021.

Reddit's success today also reflects a recent turnaround in the U.S. IPO market. In fact, tech company Astera Lab, which debuted on the New York Stock Exchange the day before, soared more than 70 percent on its first day of trading and continued its strong performance today. This is a change from last year's "big fish" IPOs, when semiconductor company Arm and online delivery company Instacart struggled for a while after going public last September.