Reddit prices IPO at $34 per share in first major social media offering since 2019

Reddit,
the
19-year-old
website
that
hosts
millions
of
online
forums,
priced
its
IPO
on
Wednesday
at
$34
a
share,
the
top
of
the
expected
range.

The
offering
brought
in
$519
million,
according
to
a

press
release,
and
values
the
company
at
close
to
$6.5
billion.
Reddit
had
planned
to
price
the
deal
at
$31
to
$34
a
share.

Reddit’s
public
market
debut
on
Thursday,
under
ticker
symbol
“RDDT,”
will
be
the
first
for
a
major
social
media
company
since


Pinterest’s
debut
in
2019
and
one
of
the

very
few
venture-backed
tech
deals
of
the
past
two
years.
Reddit
sold
15.28
million
shares
in
the
offering,
while
existing
shareholders
sold
another
6.72
million.

The
company
is
taking
a
haircut
from
its
private
market
valuation
of
$10
billion
in
2021
at
the
peak
of
the
tech
boom.
Soaring
inflation
and
rising
interest
rates
pushed
investors
out
of
risky
assets
in
2022,
eventually
forcing
startups
to
downsize,
slash
their
valuations
and
focus
on
profit
over
growth.

On
Wednesday,
data
center
hardware
company


Astera
Labs
went
public,
and
saw
its
shares
skyrocket
72%,
as
investors
flock
to
anything
involving
artificial
intelligence.
However,
the
IPO
market
has
been
in
an
extended
dry
spell
for
more
than
two
years,
with


Instacart,


Klaviyo
and


Arm
Holdings
among
the
few
tech
companies
to
hold
offerings
over
that
stretch.

Reddit’s
core
business
of
online
advertising
faces
competition
from
industry
giants
like


Alphabet
and


Meta.
The
company
also
counts


Snap,
X,


Pinterest,
Discord,
Wikipedia
and


Amazon’s
Twitch
streaming
service
as
competitors,
according
to
its
prospectus.

Revenue
increased
20%
last
year
to
$804
from
$666.7
million
in
2022.
Its
net
loss
in
2023
was
$90.8
million,
marking
an
improvement
from
the
$158.6
million
net
loss
it
recorded
the
previous
year.

The
company
has
said
in
filings
that
data
licensing
could
become
a
big
money
maker,
and
that
it
plans
to
recognize
about
$66.4
million
in
such
deals
in
2024.
The
company
recently
entered
an
expanded

partnership
with
Google,
allowing
the
search
giant
more
access
to
Reddit
data
to
train
AI
models
and
other
tasks.

Last
week,
Reddit

said
the
Federal
Trade
Commission
sent
a
letter
to
the
company
inquiring
about
its
data-licensing
practices.

As
part
of
the
initial
public
offering,
Reddit
gave
some
of
its
leading
moderators
and
users,
known
as
Redditors,
a
chance
to
buy
stock
through
a

directed-share
program.
It’s
a
model
that
was
previously
used
by


Airbnb,


Doximity
and


Rivian
to
reward
their
power
users
and
customers.