Reddit Prices Shares at $34 for IPO, Valued at $6.4 Billion
In a highly anticipated move, Reddit priced its shares at $34 for its initial public offering on Wednesday, at the high end of expectations. This move signals strong investor demand for growing tech companies, as the San Francisco-based social media company raised $748 million in the offering.
The $34 price puts Reddit’s value at $6.4 billion, below the $10 billion valuation it received in a private fund-raising round in 2021. Despite this, the pricing was seen as a favorable signal for start-ups and venture capitalists, who have been closely watching Reddit’s offering as a test for private tech companies looking to enter the public markets.
Shares of Reddit will begin trading on Thursday on the New York Stock Exchange under the ticker symbol RDDT. This comes as a positive sign for the tech industry, as activity in the IPO market has been slow, with just over 100 companies going public in the United States last year.
Matt Kennedy, a senior strategist at Renaissance Capital, noted that there was some concern over the demand for tech heading into 2024. However, Reddit’s pricing, along with a successful first day of trading for Astera Labs, an artificial intelligence company, bodes well for the rest of the pipeline.
Reddit’s path to the public markets has been long, with the company founded in 2005 and going through various changes in ownership and management. Over the years, Reddit has built its advertising business and data licensing business, which have contributed to its revenue growth.
Despite its success, Reddit has faced challenges from its users, particularly the volunteer moderators who oversee the site’s thousands of forums. Some have expressed concerns about Reddit becoming a public company and how it may impact the site’s community-driven nature.
Overall, Reddit’s IPO is seen as a significant milestone for the company and the tech industry as a whole. With its shares now trading on the stock exchange, all eyes will be on how Reddit continues to grow and evolve in the public market.
