Reddit, Tyler Le/BI
- Reddit priced its initial public offering Wednesday at $34 a share.
- The offering values the social media company at around $6.4 billion.
- Shares will start trading under the ticker "RDDT" on Thursday.
Reddit priced its hotly anticipated initial public offering at $34 a share on Wednesday, raising $748 million and valuing the social media site at around $6.4 billion.
The pricing is at the high end of the $31-$34 range the company had been targeting. The shares will begin trading on the New York Stock Exchange under the ticker "RDDT" on Thursday.
The company, along with executives and employees, sold 22 million shares in its public offering and said ahead of the IPO that it would set aside 8% for some of the site's biggest users and moderators. That follows similar moves by other high-profile companies like Airbnb and Robinhood, which set aside shares for its users when they went public. Across Reddit's stock and investing forums, the offer to participate in the IPO was met with some skepticism by users.
A Reddit spokesperson declined to comment when reached by Business Insider, saying the company "remains in a quiet period."
Reddit's offering is one of the biggest deals in what's been a mostly dormant IPO market over the past few years. When its stock begins trading, it'll be the largest social media company to go public since Pinterest made its offering in 2019.
At the end of last year, the market saw a brief spurt of IPO activity when UK chip designer Arm and grocery delivery business Instacart went public, though the deals didn't end up marking the start of a bigger trend of firms opting to IPO.
The market debut of the so-called "front page of the internet" has been long-awaited on Wall Street. The company privately filed for an initial public offering in late 2021, around the time subreddits like r/WallStreetBets were soaring in popularity amid the retail investor boom. The social media site now has over 73 million active daily users, it said in its IPO filing.
Reddit pulled in $804 million in revenue in 2023, up 21% from the prior year, according to its filing, though it lost $90.8 million during the year. That's down from a loss of $158.6 million in 2022.
The company also recently signed a $60 million a year content licensing deal with Google, to help train the search engine's AI models.
"[I]n a world increasingly saturated with AI-generated content, we expect users to increasingly seek out and value fresh ideas, and that models will need to refresh their learning from these ideas. As AI and machine learning technology becomes more ubiquitous and used, we believe the importance of Reddit data goes up," the company said in its IPO documents.