Reddit is poised to make its debut as a publicly traded company with a market value of $6.4 billion following the pricing of its initial public offering (IPO) at $34 per share.
This announcement, made late on Wednesday, marks the culmination of weeks of investor interest and sets the stage for Reddit's shares to start trading on the New York Stock Exchange under the ticker symbol RDDT. The IPO, which aims to raise $748 million, will involve the sale of 22 million shares.
While Reddit's current valuation represents a decline from its 2021 valuation of $10 billion, it remains an attractive investment opportunity, with its IPO being four to five times oversubscribed prior to its launch.
Advance Publications, the parent company of Condé Nast, holds the largest stake in Reddit, positioning it as a significant player in the company's ownership structure.
Despite recording net losses since its inception in 2005, Reddit boasts approximately 267 million weekly average users and a vast repository of posts, making it one of the largest social networks and content platforms globally.
While it has not achieved the same level of global dominance as Meta, Reddit's IPO filing revealed staggering figures, including approximately 1 billion posts and over 100,000 active subreddits.
In its quest to stem annual losses and explore new revenue streams, Reddit has pursued partnerships, including a recent deal with Google to utilize its user-generated data for AI model training. This strategic move positions Reddit as an invaluable resource for companies seeking to enhance their AI tools.
However, concerns loom over potential user-driven volatility in the stock price, prompting Reddit to allocate a small portion of its IPO shares to its own users, including unpaid moderators.
Reddit CEO Steve Huffman's efforts to boost revenue have sometimes sparked backlash from users and moderators, as seen in the protests following decisions to implement subscription fees for certain features. Despite such challenges, Reddit remains a prominent force in the social media landscape, with its IPO signaling a new chapter in its evolution as a publicly traded entity.
