Reddit announces IPO plans, aiming to raise $748M with shares priced between $31 and $34
Reddit Inc., the social media giant, has unveiled details of its highly anticipated initial public offering (IPO), seeking to raise up to $748m, marking one of the year's most significant market debuts, according to Financial Post.
The company plans to offer 22 million shares, priced between $31 and $34 each, with about 15.3 million shares being sold by Reddit and the remainder by its investors and employees.
At the upper end of the price range, Reddit's market value could reach $5.4bn, based on the expected 158.98 million outstanding shares.
Notably, 8 percent of the IPO shares are reserved for Reddit users and moderators, along with some board members and employees' friends and family, without a lock-up period, allowing them to sell shares on the opening day.
The IPO is spearheaded by leading financial institutions, including Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp., and will see Reddit's shares listed on the New York Stock Exchange under the symbol RDDT.
This move comes after Reddit's valuation journey, from a $10bn valuation in 2021 to considerations of a $5bn valuation based on early investor feedback. The platform joins the ranks of other prominent companies eyeing public offerings, amidst a backdrop of fluctuating IPO market dynamics.
Despite a net loss of $91m on $804m revenue in 2023, Reddit has shown improved financial health from the previous year and boasts a daily active unique visitor count of 73.1 million in the last quarter.
Advance Magazine Publishers Inc., part of the Newhouse family's publishing empire, remains Reddit's largest shareholder.
The IPO highlights Reddit's mixed blessings, with its vibrant user community being both a strength and a challenge due to their historically contentious relationship with the platform.
Furthermore, Reddit's role in the meme stock phenomenon and its ongoing exploration of artificial intelligence data licensing, including a notable deal with Alphabet Inc.'s Google, underscore its multifaceted strategy for growth.
As Reddit embarks on this significant financial milestone, the company, led by co-founder and CEO Steven Huffman, remains focused on expanding its platform and business, particularly through advertising and innovative AI licensing agreements.
