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Reddit Set to Make Post-IPO Debut, Priced at US$34 Per Share Amid Strong Demand



Reddit will enter a new era as a publicly traded company with a market value of $6.4 billion after the social media platform IPO at a price of $34 per share.

The price announced Wednesday evening is at the high end of the target range set by Reddit’s investment bankers as they spent the past few weeks gauging investor demand for the stock. That sets the stage for Reddit shares to begin trading Thursday on the New York Stock Exchange under the ticker “RDT,” a debut likely to spark a flurry of commentary on Reddit’s own platform, as well as on social media competitors.

Much of the interest in Reddit comes from a large audience who religiously visit the service to discuss a potpourri of topics ranging from silly memes to existential worries, as well as to get recommendations from like-minded people .

However, by tech industry standards, Reddit remains extraordinarily small for a company that has been around since 2005.

Meta Platforms – whose largest social media service Facebook launched just 18 months earlier than Reddit – boasts a market value of more than $1.2 trillion. Meta also generates an annual revenue of $135 billion, while Reddit’s remains under $1 billion.

And then there’s this problem: Reddit never took advantage of its broad reach, while racking up cumulative losses of $717 million. This figure increased from cumulative losses of $467 million in December 2021, when the company first filed documents to be made public before aborting the attempt.

In filings for its IPO revival, Reddit attributed the losses to a fairly recent focus on finding new ways to increase revenue.

But Reddit will now have more money in the bank to fund its ambitions to expand its influence and generate more revenue in the process.

The IPO raised about $519 million for the San Francisco-based company, but the company won’t receive all that money because it still has to pay commissions and other costs associated with the offering. Bankers still have 30 days to sell an additional 3.3 million shares, which would raise an additional $112 million before fees and charges are deducted.

Reddit has reserved up to 1.76 million of the 15.3 million shares on offer in the IPO for users of its platform. In keeping with typical IPO practice, the remaining shares were purchased primarily by mutual funds and other institutional investors betting that Reddit is ready for prime time in the financial industry.


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