Reddit gold getting real: Reddit sold shares to public, raised 748 million dollars
Reddit and its existing shareholders sold 22 million shares at 34 dollar a share, giving Reddit a valuation of about 6.4 billion dollars on Wednesday, boosting the tech IPO market.
Social media platform Reddit, designated RDDT.N, priced its initial public offering at the top of its targeted range of 31 dollar to 34 dollar per share on Wednesday, raising 748 million dolar and giving the ailing technology IPO market a much-needed boost.
To tap retail investors, Reddit reserved 8 percent of the total shares on offer for eligible users and moderators on its platform, certain board members and friends and family members of its employees and directors.
Excluding the shares sold by existing shareholders, Reddit raised gross proceeds of 519.4 million dollar from its IPO. Earlier on Thursday, Reddit and its bankers were guiding so they could price the IPO at the top of the indicated range or above.
The top-end pricing is a vindication of the company's decision to lower its valuation expectations, after it was valued at 10 billion dollar in a private fundraising round in 2021.
The successful offerings of Reddit and Astera LabsALAB.O could boost the lackluster tech IPO market after two years of largely subdued activity. Earlier this year, the stock market launches of other big names including KKR-backed BrightSpring and sportswear brand Amer Sports received a lukewarm reception from investors.
Despite the loyalty of many of its users, Reddit has lost money every year since its launch in 2005 and has lagged the commercial success of contemporaries such as Meta Platforms' META.O Facebook and X, formerly known as Twitter.
The focus of many Reddit users on niche subjects and the platform's somewhat loose approach to content moderation has been a sticking point with some advertisers.
