by Luzi Ann Santos | moomoo News

$Reddit (RDDT.US)$ shares soared 48% at close on its first trading day as investors rushed to get a piece of the social media platform that has more than 73 million daily active unique visitors.

Shares of the social media platform opened at $47, above its public offering price of $34. It touched a high of $57.80 in its first hour of trading before ending the day at $50.44.

The social media company and its shareholders raised $748 million in its US initial public offering that priced at the top of a marketed range, Bloomberg reported before shares started trading. The company sold 15.3 million shares, while some stockholders offered 6.7 million shares, according to a press release issued Wednesday.

Reddit also granted underwriters a 30-day option to additional shares of as much as 3.3 million Class A stock at the IPO price, less underwriting discounts and commissions, it said.

In its IPO filing with the Securities and Exchange Commission earlier in the week, the company said its loss narrowed to $90.8 million in the year ended Dec. 31, 2023, from $158.6 million a year earlier. It reported gross margins of 86% last year, up from 84% in 2022.

"Our high gross margin and capital-efficient business model is simple and scalable and allows us to invest deliberately in our global opportunity," according to its SEC filing on March 19.

The company's revenue rose 21% last year to $804.0 million.

Still, the company cited risks to its business adding that it has "a history of net losses and we may not be able to achieve or maintain profitability in the future." It also said its "results of operations may fluctuate from quarter to quarter, which makes them difficult to predict."

As of the end of last year, it said it had an accumulated deficit of $716.6 million.

"We are in the early stages of monetizing our business and there is no assurance we will be able to scale our business for future growth," the regulatory filing showed.

Morgan Stanley & Co., Goldman Sachs, JPMorgan, and BofA Securities are the lead book-running managers for the offering. Citigroup, Deutsche Bank Securities, and MUFG are the joint book-running managers.