The long-awaited Reddit IPO happened Thursday afternoon, and shares in the company soared 48%, closing at $50.31 per share by the end of the day — well above the initial price of $34.

The story of Reddit's IPO is fairly similar to many Bay Area tech companies, but also different in several key ways. First, Reddit has been in existence for about as long as Facebook has, having been founded in 2005 by University of Virginia roommates Steve Huffman and Alexis Ohanian, along with Aaron Swartz. But Facebook went public a full twelve years ago, and was generally a much more profitable enterprise — with Reddit eschewing ads for many years, until they didn't.

It's also an IPO of a company that, in 19 years, has never turned an actual profit. As the Associated Press reports, Reddit had cumulative losses of $467 million in December 2021 — when it initially filed for an IPO and then aborted that process. Those losses have since swelled to $717 million as of December 2023. "In the recent documents filed for its revived IPO, Reddit attributed the losses to a fairly recent focus on finding new ways to boost revenue," the AP writes.

But the most interesting and unusual part of the Reddit IPO is that the company planned to share the early windfall generated by the stock sale with some longtime Redditors and volunteer moderators, who arguably are the backbone of the old-school message-board-style site.

Reddit has long made a rule that moderators can not be paid for or profit from being moderators, and various estimates have been made about the annual value of all that unpaid labor. But today, some number of loyal mods were given the privilege of buying Reddit shares at the IPO price of $34, and they are unbound by "lock-up agreements" that employees and board members have for their shares — meaning that they could sell them right away after the stock price "popped" nearly 50%.

They could also, conceivably, wait a few days and see the price pop even further before settling back down. As the AP noted earlier this week, the stock could be volatile. But looking at Robinhood Markets as an example, their IPO price was $38, it shot up to $85 per share five days later, and within six weeks it settled back down at $40.

Reddit set aside 1.76 million shares, roughly 8% of the stock being sold, for "friends and family" of staff and board members, and longtime mods and other Redditors. How many shares each Reddit moderator or user could purchase was based on a six-tiered system based on their "karma" scores on the site. (Redditors earn "karma" points for posting helpful or amusing content or comments.) And moderators got further priority based on the number of "moderator actions" they had taken during their tenure.

There was some concern on Wall Street that this 8% block of shares could increase the volatility of the stock in its opening weeks, since those shares won't be locked up and the buying and selling of them could exert noticeable pressure on the stock price.

In any event, some of those users and mods might have made bank in just the last few hours, if they didn't want to wait around to see if the price shoots up higher tomorrow, or next week.  Someone with 1,000 shares, for instance, at the IPO price would have made $16,000 by close of market, and if they had 10,000 shares they made $160,000 if they were able to sell.

Sidenote: Mr. Serena Williams, Alexis Ohanian, likely got quite rich on paper today as well.

If it's any indication of volatility, the price has already come down $2 per share, to $48, in after-hours trading in the last 40 minutes.

Related: Reddit Moderators Revolt Over Company’s Lax Misinformation Policy