Reddit priced its shares at $34 per share on Wednesday, above the high end of its expected range, a sign of investor excitement for the company’s IPO on Thursday. The social media giant raised nearly $500 million in the offering.
Excluding employee stock options, the 19-year-old company’s valuation will start at $5.4 billion, matching its last private placement of $10 billion set in August 2021, the peak of the last tech market boom. Far from it.
The stock, the most anticipated stock so far this year, will debut on the New York Stock Exchange on Thursday under the ticker “RDDT.”
If Reddit’s stock price rises on its debut, other companies awaiting venture capital backing will surely begin the IPO process soon after.
Astera Labs, which provides connectivity hardware for data computing data centers, saw its stock price rise 72% on its first day of trading on Wednesday, a strong signal that the public market is ready for newly listed companies.
Two major 2023 IPOs, Instacart and Klaviyo, received a lukewarm response from Wall Street last year despite being profitable on an EBITDA basis.
But Reddit is still generating Net loss exceeded $90 millionwhile boosting profits for newly listed companies, could be detrimental to the company’s stock.
However, investors can consider Reddit’s Join the Artificial Intelligence Boom attractive. The company recently began selling its data to Google for use in training artificial intelligence models, and may be working on more similar licensing deals, which could become an important revenue growth pipeline for the business. In January, it sold $203 million worth of contracts to artificial intelligence companies to gain access to its data, according to one company. Recent submissions.
