Reddit Goes Public in Blockbuster IPO, But Path to Profitability Remains Unclear

Reddit recently went public in an IPO, with shares surging on the first day of trading. Billionaire investors like Sam Altman and Cathie Wood invested early and made huge profits.

Reddit is positioning itself at the intersection of social media and AI, licensing data to train models like ChatGPT. It sees potential in e-commerce as well.

However, Reddit has never been profitable despite almost 20 years in business. It spent over 50% of revenue on R&D last year.

Revenue grew 21% last year to $804 million, but the company still lost $87 million. The current valuation looks expensive.

For investors, Reddit stock seems risky and speculative at this point until clearer profits materialize. Other stocks likely have better risk-reward.