Reddit set for NYSE debut after pricing IPO at $34 apiece
Reddit IPO, which is valued at about $6.4 billion, will make its New York Stock Exchange (NYSE) debut on Thursday under the symbol RDDT following an IPO priced at $34 per share, the business announced in a statement on Wednesday, as per AFP news report.
After pricing strongly in its initial public offering, which indicated increased investor appetite for new stock issuers, the social network Reddit was scheduled to make its trading debut on Thursday.
It was reported by Reuters recently that the IPO was oversubscribed by four to five times as many investors expressed an interest in the issue. However, the news report citing sources stated that, although a great performance in the stock market debut was not guaranteed, the over-subscription signified that the business is expected to price its IPO at least at its targeted price range of $31 to $34 per share.
A total of $748 million was raised at the IPO, with around $228 million going to Reddit stockholders who chose to sell some of their holdings, as per AFP news report.
Originally based in San Francisco, Reddit filed for an IPO in 2021, at a time when the market was flourishing due to a digital bubble on the backdrop of Covid-19; however, the plan was dropped as the internet economy cooled.
Unlike Facebook or X (previously Twitter), Reddit is divided into over 100,000 topic-specific chatrooms called subreddits, which makes it more niche and less likely for content to go popular, according to AFP news report.
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Even so, 73 million average daily users and 267 million monthly users, mostly in the US, are registered on Reddit, according to a filing to US regulators, as reported by AFP.
The company stated that it will issue 15.2 million shares at a price between $31 and $34 in its filing earlier this month.
In an effort to follow in the footsteps of businesses such as Airbnb and Rivian, Reddit reserved around 8% of the IPO shares for moderators and high-ranking users, referred as “Redditors.”
Also Read: Reddit’s CEO Steve Huffman leaves ‘young troll’ image behind in run-up to IPO
On the other hand, Reddit has never made a profit in itstwo decades of operation, raising many doubts about the platform’s potential for success. With 717 million USD in total losses, Reddit has never benefited from its wide audience. In December 2021, the business filed papers to go public but subsequently cancelled the plan, resulting in cumulative losses of USD 467 million. That sum has since increased, as PTI news report.
Also Read: Reddit’s IPO Fate Rests With Users Who Fueled Meme Stock Frenzy
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Published: 21 Mar 2024, 12:23 PM IST
