Reddit (RDDT) has entered its first full day of trading since its IPO on the New York Stock Exchange on Thursday. Despite soaring 48% on its market debut, investors remain wary of potential volatility stemming from the company's decision to offer shares to investors without imposing a lockup period.

Yahoo Finance's Jared Blikre and Seana Smith break down the details

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Editor's note: This article was written by Angel Smith

Video Transcript

- We are watching shares of Reddit. It is trading slightly down this morning. And that's the company's second day of trading. Move comes after the stock popped 48% on its debut. And Seana, this finally, that pop we got was after 1:00 PM yesterday.

So these IPOs coming out a little bit late in the day. But we haven't had that many to focus on. And so a lot of people looking on this with eyes towards, well, can we extrapolate what this means for the broader M&A market, the broader capital markets coming to market trying to sell your shares? I don't know what kind of case this makes.

But there were concerns that because they were selling directly to people who didn't have a lock up that there might be some volatility, but it looks like the volatility has been to the upside, which, generally, investors tend to like.

- Yeah, certainly, popping 48% in the first day of their public debut here, the first day of trading on the public markets. And that also follows some of that excitement that we saw earlier this week with the Astera Labs when that stock jumped just about 72%. And I bring that up because Reddit has really been trying to sell itself or position itself, at least, in the minds of investors as an AI play.

And the ability really to capitalize on that AI strength and growth here over the coming quarters and really get, eventually, its business to profitability. We saw some of that excitement yesterday when you take a look at the shares popping. Also, from Astera Labs that stock up just about 70 or was up 72% in its first day of trading. Whether or not, though, we can really say that those two names make a trend, it's too early to tell. But it shows the excitement.

- It shows the excitement. And I think that's a broad takeaway because Reddit was able to make one sale to Google. For what? $60 million. And now everybody sees trillions of dollars in dollar signs. I would, too, if I just sold Google.

I don't know how much the data is worth. I don't know if anybody else does, either. But I mean, that's what we're going to try and figure out. I just think this is an old school media play. They haven't tried to make money or really tried to gear up towards monetization in 20 years.

They're finally coming to market now. But is there a plan? And I just don't know if that's been articulated, yet.

- Yeah, exactly. And I think that's a lot of people who have been skeptical of this public debut, skeptical of Reddit being really being able to prove it is on a sustainable path here to profitability.

I think that has a lot of people or has kept some of those skeptics on the sidelines, at least, for now. But again, Reddit shares opening the day just a bit lower. But again, after shares soared, almost 50% in the first day of trading.