The NYSE debut of Reddit saw a 70% increase in price after the company sold shares at the top of the range.

• The New York Stock Exchange listed Reddit under the stock symbol "RDDT."
• On Wednesday, the 19-year-old website with millions of online forums set its IPO price at $34 a share, which was the top end of the anticipated range.
• The company raised approximately $750 million from the offering, with $519 million collected.

On Thursday, Reddit's shares experienced a 70% increase during its initial public offering, making it the first major social media company to go public since 2019.

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

The stock opened at $47 and reached a high of $57.80. At Thursday's peak, the company had a market cap of about $10.9 billion. However, Reddit shares dropped to $48.64 roughly half-an-hour after they began trading, giving the company a market cap of about $7.9 billion.

Reddit is testing investor appetite for new tech stocks after a prolonged drought of IPOs. Since the peak of the technology boom in late 2021, few venture-backed tech companies have gone public, and those that have, such as and last year, have disappointed. On Wednesday, data center hardware company made its public market debut on Nasdaq and saw its shares surge 72%, indicating investor excitement over businesses linked to the boom in artificial intelligence.

In 2022, Reddit's IPO price was valued at $6.5 billion, a decrease from its private market valuation of $10 billion in 2021. This shift in valuation occurred due to rising interest rates and inflation, which caused investors to move away from high-risk assets. In response, startups conducted layoffs, reduced their valuations, and shifted their focus to profit over growth.

In 2023, Reddit's annual sales increased by 20% to $804 million from $666.7 million in the previous year, while the company's net loss decreased to $90.8 million from $158.6 million in 2022.

According to FactSet, Reddit's market cap at IPO gave it a price-to-sales ratio of about 8, while Pinterest's sits at 7.5 and trades for 3.9 times sales.

In addition to the companies mentioned in its prospectus, Reddit also considers X, Discord, Wikipedia, and Twitch streaming service as its competitors.

Reddit anticipates that data licensing could be a significant source of income and has already entered into certain data licensing arrangements worth $203.0 million with terms ranging from two to three years. This year, the company expects to recognize approximately $66.4 million in revenue from its data licensing deals.

Reddit has partnered with Google to provide the search giant with more access to its data, which will be used to train AI models and enhance its products.

The Federal Trade Commission is currently conducting a private investigation into Reddit's sale, licensing, or sharing of user-generated content with third parties to train AI models. Reddit stated that it was not surprised by the FTC's interest in the company's data licensing practices related to AI and believes that it has not engaged in any unfair or deceptive trade practices.

Reddit was founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, who is now the company's CEO. In the IPO, existing stakeholders, including Huffman, sold a combined 6.7 million shares. 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. Similar programs have been used by companies like , and to reward their power users and customers.

"Huffman stated in an interview with CNBC on Thursday that he hopes the investors believe in Reddit and support it, but the ultimate goal is to get them involved in the deal, as any professional investor would do."

The IPO of the company has been met with skepticism from Redditors due to its financials and history of conflicts with moderators. Huffman acknowledged this reality and acknowledged the role of the controversial subreddit Wallstreetbets in the meme stock boom.

"Huffman stated, "Reddit is great because they're honest, but remember, it's their favorite platform and home online.""

Reddit has a major shareholder in OpenAI CEO Sam Altman, who is also a shareholder along with Advance Magazine Publishers, the parent company of 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."