The CEO says the company is ready for more AI and advertising.

Even after a lucrative deal with tech best Google (GOOG, GOOGL), new investors shouldn’t call Reddit (RDDT) an AI play.

Or so says co-founder and CEO Steve Huffman.

“I think they should look at Reddit as a community platform that has many avenues for success,” Huffman told Yahoo Finance Live on Thursday, as his 19-year-old company went public on the New York Stock Exchange. .

According to Huffman, Reddit is pursuing more deals that feed its data to big language models (LLMs), but the company also aims to get a bigger piece of the advertising pie.

Initially expected to price its IPO in the $31 to $34 per share range, Reddit ended its IPO price at $34 late Wednesday, giving it an initial valuation of $6.4 billion. The targeted valuation was lower than the $10 billion raised in the 2021 funding round on an entirely weak basis.

The stock opened Thursday afternoon trading at $47 a share and quickly rose above $53.

Reddit is the first major social media IPO since the debut of Pinterest ( PINS ) in 2019.

The Road to the Reddit IPO

It’s been a long road for Huffman — who was a ballroom dancer in his college days — and the Reddit team to get to their Thursday IPO.

The company — which Huffman often says is not a social media platform but a democratic community — was founded in 2005 by Huffman and friend Alexis Ohanian.

The pair sold Reddit to Conde Nast a year later for $10 million. Hoffman stayed on until his contract expired in 2009. Ohanian left in 2010.

Welcome to the public markets, Reddit. (Brian Suzy)

Condé Nast’s parent company, Advance Publications, went out of business in 2011. After churning through the two CEOs, Reddit brought back Ohanian as executive chairman in 2014, then Huffman as CEO a year later.

Since then, Huffman has added moderation topics to hot-button content on the platform, steered the business during the meme-stock uprising, and poised the company to capitalize on ad dollars.

Most recently, Reddit inked a $60 million deal to license its data to train Google’s LLMs. The prospect of more AI licensing deals was a key point for investors during its IPO roadshow.

Ohanian moved on in 2020, noting that he wants to give his board seat to a diverse candidate. Interestingly, they were omitted from Reddit’s prospectus.

Despite being in business for nearly 20 years, Reddit has never turned a profit. Last year, the company’s sales rose 21 percent year-over-year to $804 million. The net loss reached $90.8 million. Its daily user base is around 73 million strong.

“I like the trend we’re on,” Huffman said when asked if the adjusted profits achieved at the end of 2023 would continue into 2024. He declined to say whether Reddit will be profitable in 2024.

Other facts to know:

  • AI kingmaker Sam Altman and Chinese tech giant Tencent are Reddit’s fourth and second largest shareholders, respectively.

  • Huffman’s 2023 total compensation was $193.2 million, including $93.7 million in option awards and $98.3 million in stock awards.

  • Key call from its SEC filing: “Our Chief Executive Officer, Steven Huffman, has 662,447 PRSUs for shares of our Class B common stock issuable upon the acquisition of a condition that is the basis for our $5.0 billion market acquisition. will be deemed to be satisfied.The valuation of capitalization after this offer.

  • The GameStop ( GME ) and AMC ( AMC ) meme stock trading saga was mentioned in the Company’s Risk Factors section.

  • 1.76 million shares were reserved to buy the Reddit user base.

Brian Suzy is the executive editor of Yahoo Finance. Follow Suzy on Twitter/X @BrianSozzi And on LinkedIn. Suggestions on deals, mergers, worker conditions, or anything else? Email

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