Reddit, a 19-year-old website that hosts millions of online forums, priced its IPO on Wednesday at $34 per share, at the high end of its expected range.
According to some sources, the offering brought in $519 million. press release, and values the company at nearly $6.5 billion. Reddit had expected the acquisition price to be between $31 and $34 per share.
On Thursday, Reddit will become the first major social media company to debut on the public market under the ticker symbol RDDT. on pinterest It debuted in 2019 and is one of the few venture-backed technology deals in the past two years. Reddit sold 15.28 million shares in the offering, and existing shareholders sold an additional 6.72 million shares.
The company will write off its $10 billion private market valuation in 2021, which was at the peak of the tech boom. Soaring inflation and rising interest rates will drive investors out of risk assets in 2022, ultimately forcing startups to scale back, lower valuations and focus on profits over growth. .
Wednesday, data center hardware company Astera Research Institute went public, and its stock price soared 72% as investors flocked to anything related to artificial intelligence. However, the IPO market has been in a prolonged drought for more than two years. instacart, Claviyo and arm holdings It’s one of the few technology companies to offer products for that length of time.
Online advertising, Reddit’s core business, faces competition from industry giants including: alphabet and meta.Companies also count snapX, pinterestDiscord, Wikipedia, Amazon’s According to the prospectus, one of its competitors is the streaming service Twitch.
Revenue increased 20% from $666.7 million in 2022 to $804 last year. Net loss for 2023 was $90.8 million, an improvement from the $158.6 million net loss recorded in the prior year.
The company said in a filing that data licenses could be a significant source of revenue, and that it expects to recognize approximately $66.4 million in such transactions in 2024. partnership The partnership with Google will give the search giant greater access to Reddit data to train AI models and other tasks.
Reddit said last week that the Federal Trade Commission sent a letter to the company asking about its data licensing practices.
As part of its initial public offering, Reddit We gave some of our key moderators and users, known as Redditors, the opportunity to purchase shares through our directional sharing program.This is the model I used before. airbnb, toxic parent and Rivian This is to reward power users and customers.