Reddit will enter a new era as a publicly traded company with a market value of $6.4 billion after the social media platformsa国际传媒檚 initial public offering was priced at $34 per share.
The price announced late Wednesday came in at the top end of the target range set by Redditsa国际传媒檚 investment bankers as they spent the past few weeks gauging investor demand for the stock. It sets the stage for Redditsa国际传媒檚 shares to begin trading Thursday on the New York Stock Exchange under the ticker symbol sa国际传媒淩DDTsa国际传媒� in a debut likely to spur a flurry of commentary on Redditsa国际传媒檚 own platform, as well as competing social media outlets.
The interest surrounding Reddit stems largely from a large audience that religiously visits the service to discuss a potpourri of subjects that range from silly memes to existential worries, as well as to get recommendations from like-minded people.
By tech industrysa国际传媒檚 standards though, Reddit remains extraordinarily small for a company that has been around since 2005.
Meta Platforms sa国际传媒� whose biggest social media service Facebook was started just 18 months earlier than Reddit sa国际传媒�- boasts a market value of more than $1.2 trillion. Meta also generates annual revenue of $135 billion, while Redditsa国际传媒檚 remains below $1 billion.
And then there is this problem: Reddit has never profited from its broad reach, while piling up cumulative losses of $717 million. That number has swollen from cumulative losses of $467 million in December 2021, when the company first filed papers to go public before aborting that attempt.
In the documents filed for its revived IPO, Reddit attributed the losses to a fairly recent focus on finding new ways to boost revenue.
But Reddit will now have more money in the bank to finance its ambitions to expand its influence and reel in more revenue in the process.
The IPO raised about $519 million for the San Francisco-based company, but the company wonsa国际传媒檛 receive all that money because it still has to pay amount commissions and other costs associated with the offering. Bankers still have a 30-day window to sell another 3.3 million shares that would raise an additional $112 million before deducting commissions and fees.
Reddit set aside up to 1.76 million of the 15.3 million shares being offered in the IPO for users of its platform. Per the usual IPO custom, the remaining shares were bought primarily by mutual funds and other institutional investors betting Reddit is ready for prime time in finance.
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Michael Liedtke, The Associated Press
