Reddit, the social media platform, has finally become a publicly traded company. Despite initial skepticism about its lack of profits, the company's shares soared on their debut due to enthusiasm for its potential in artificial intelligence (AI). Retail investors had limited access to the initial public offering (IPO), with the stock opening higher than its IPO price. Notable winners in the Reddit IPO include Sam Altman, CEO of OpenAI, and Cathie Wood of ARK Invest. Altman has been an investor in Reddit for several years and owns a stake estimated to be worth $600 million. Wood's company purchased around 10, 000 shares worth about $500, 000. Reddit's unique position at the intersection of social media and AI makes it an interesting investment prospect.

The company also has plans to enter e-commerce and expand its subreddits into marketplaces. However, investors should be aware of the risks, as Reddit has never been profitable for a full year in its nearly 20-year history. The company's revenue increased by 21% last year, reaching $804 million. After the IPO, Reddit stock is trading at a price-to-sales ratio of about 10, which is comparable to Meta Platforms and slightly higher than Pinterest. However, neither of these companies is profitable on a GAAP or adjusted EBITDA basis. Given the risks and uncertainties, it may be wise for investors to wait for a better entry point or clearer evidence of sustainable profitability from Reddit.