Reddit has priced its IPO at $34 per share, the higher end of its expected range, valuing the social media platform at about $6.4 billion.

The company’s debut on the New York Stock Exchange on Thursday was highly anticipated given the lull in public listings over the past two years. Reddit is the first major social media company to go public since Pinterest (PINS) in 2019.

The user-generated discussion platform has been around since 2005, but gained recognition during the 2021 meme frenzy. At the time, retail traders on the subreddit Wall Street Bets heavily encouraged short squeezes on shares of video game retailer GameStop (GME), theater chain (AMC), and others shorted shares.

The IPO is expected to gauge investor appetite for technology-related offerings at a time when monetary policy is tight.

UKRAINE – 08/02/2021: In this photo illustration, a Reddit logo is seen on a mobile phone screen in front of the WallStreetBets (WSB) logo of a subreddit where participants discuss stock and options trading. (Photo illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) (SOPA images via Getty Images)

Reddit’s revenue rose about 20% year over year to $804 million in 2023, according to the company’s S-1 filing. About 98% of revenue in the third quarter of last year was generated by advertising on the platform.

The company is not profitable; net loss fell from $158.6 million in 2022 to $90.8 million last year.

The site had 500 million visitors in 2023 with an average of 73.1 million daily active unique visitors during the three months ending in December.

Reddit noted that the “content is particularly important” for artificial intelligence, or AI, according to its S-1 filing.

“We are exploring business opportunities in the area of ​​data licensing for machine learning, business analytics, rendering and training of generative AI models, among others,” the filing said.

Headline venture partner Kamran Ansar says he sees AI more applicable to the site’s content moderation.

“I think it’s de jure these days: you have to mention AI and what you do with it. I think it can probably help with management,” Ansari told Yahoo Finance.

“And one of the things that’s always been a little bit tougher with Reddit is that the content can’t be as advertiser-friendly,” he said.

In a nod to Redditors, the company set aside 1.76 million shares for sale to eligible users and moderators on the platform, with no lock-up period.

This move lends itself to volatility, says Headline’s Ansari.

“You might see a big rise in the stock price and a drop,” he said. “Because this has such a rabid community around it, the Reddit users, you could ironically see Reddit itself become a meme stock, like you saw happen with AMC and GameStop.”

Ines is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre

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