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Reddit shares jumped 38% on Thursday to open at $47 in the first initial public offering for a major social media company since Pinterest‘s debut in 2019.

The 19-year-old website that hosts millions of online forums priced its IPO on Wednesday at $34 a share, the top of the expected range. Reddit and selling shareholders raised about $750 million from the offering, with the company collecting about $519 million.

Trading under the ticker symbol “RDDT,” Reddit is testing investor appetite for new tech stocks after an extended dry spell for IPOs. Since the peak of the technology boom in late 2021, hardly any venture-backed tech companies have gone public and those that have — like Instacart and Klaviyo last year — have underwhelmed. On Wednesday, data center hardware company Astera Labs made its public market debut on Nasdaq and saw its shares soar 72%, underscoring investor excitement over businesses tied to the boom in artificial intelligence.

Reddit is taking a haircut from its private market valuation of $10 billion in 2021, a boom year for the tech industry. The mood changed a year later, however, when investors became concerned over rising interest rates and soaring inflation and exited high-risk assets. In response, startups conducted layoffs, trimmed their valuations, and shifted focus to profit over growth.

Reddit’s annual sales for 2023 rose 20% to $804 million from $666.7 million a year earlier, the company detailed in its prospectus. The company recorded a net loss of $90.8 million last year, narrower than its loss of $158.6 million in 2022.

Based on its revenue over the past four quarters, Reddit’s $6.5 billion market cap at IPO gives it a price-to-sales ratio of about 8. Alphabet trades for 6.1 times revenue, Meta has a multiple of 9.7, Pinterest’s sits at 7.5 and Snap trades for 3.9 times sales, according to FactSet.

In addition to those companies, Reddit also counts X, Discord, Wikipedia and Amazon’s Twitch streaming service as competitors in its prospectus.

Reddit is betting that data licensing could become a major source of revenue, and said in its filing that it’s entered “certain data licensing arrangements with an aggregate contract value of $203.0 million and terms ranging from two to three years.” This year, Reddit said it plans to recognize roughly $66.4 million in revenue as part of its data licensing deals.

Google has also entered into an expanded partnership with Reddit, allowing the search giant to obtain more access to Reddit data to train AI models and improve its products.

Reddit revealed on March 15 that the Federal Trade Commission is conducting a non-public inquiry “focused on our sale, licensing, or sharing of user-generated content with third parties to train AI models.” Reddit said it was “not surprised that the FTC has expressed interest” in the company’s data licensing practices related to AI, and that it doesn’t believe that it has “engaged in any unfair or deceptive trade practice.”

Reddit was founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, the company’s CEO. Existing stakeholders, including Huffman, sold a combined 6.7 million shares in the IPO.

As part of the IPO, Reddit gave some of its top moderators and users, known as Redditors, a chance to buy stock through a directed-share program. Companies like Airbnb, Doximity and Rivian have used similar programs to reward their power users and customers.

“I hope they believe in Reddit and support Reddit,” Huffman told CNBC in an interview on Thursday. “But  the goal is just to get them in the deal. Just like any professional investor.”

Redditors have expressed skepticism about the IPO, both because of the company’s financials and its often troubled relationship with moderators. Huffman said he recognizes that reality and acknowledged the controversial subreddit Wallstreetbets, which helped spawn the boom in meme stocks like GameStop.

“That’s the beautiful thing about Reddit, is that they tell it like it is,” Huffman said. “But you have to remember they’re doing that on Reddit. It’s a platform they love, it’s their home on the internet.”

OpenAI CEO Sam Altman is one of Reddit’s major shareholders along with Tencent and Advance Magazine Publishers, the parent company of publishing giant Condé Nast. Altman’s stake in the company was worth over $400 million before the stock began trading. Altman led a $50 million funding round into Reddit in 2014 and was a member of its board from 2015 through 2022.

WATCH: Investors are watching Reddit IPO “very closely.”

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