How Social Media Companies Traded Post-IPO: A Comparative Analysis

The initial public offering (IPO) of a social media company is a significant event in the business world, often accompanied by high expectations and intense scrutiny. As we gear up for Reddit’s IPO, it is worth taking a trip down memory lane to examine past social media public debuts.

This article will compare Facebook’s IPO in 2012, Snapchat’s IPO in 2017, and Bumble’s IPO in 2021, highlighting key features and price action.

Facebook’s IPO:

Facebook, now Meta, listed on May 18, 2012, and raised $16 billion through the offering. The stock price plummeted after the IPO, with shares down 60% in the months following and taking a year to get back above the initial price.

Despite the initial difficulties, Facebook’s focus on its mobile platform helped boost the company’s revenue in the years following the IPO.

Snapchat’s IPO:

Snapchat, another large social media company, went public in 2017. While smaller than Facebook, Snapchat only sold about $4 billion in shares, compared to Facebook’s $16 billion.

Snapchat’s IPO did not face the same level of volatility as Facebook’s, but it did not match the meteoric growth of its predecessor.

Bumble’s IPO:

Bumble, an online dating app, went public on February 11, 2021, and was valued at $4 billion at the time. Unlike Facebook and Snapchat, Bumble’s IPO was not accompanied by significant volatility, with the stock price remaining relatively stable after the offering.

Key Features and Price Action:

One of the key features of the Reddit IPO is the allocation of shares to users, potentially providing extra volatility due to the potential sale of these shares by users.

It is worth noting that Facebook’s IPO was marred by a glitch in NASDAQ’s electronic trading system, which delayed some investors from selling the stock on its first day of trading.

Conclusion:

As we look forward to Reddit’s IPO, it is clear that social media companies have had varying experiences with their post-IPO trading. While Facebook faced significant volatility and Snapchat experienced more stability, Bumble’s IPO was relatively smooth.

As investors and observers alike prepare for Reddit’s entry into the public market, the question remains: How will the company fare in the post-IPO trading environment?