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Social media company Reddit priced its shares at $34 ahead of its expected public offering in New York on Thursday, coming in at the top of its previous price guidance, giving it a fully diluted valuation of $6.4 billion, according to people familiar with the matter.
This puts Reddit's valuation well below the $10 billion it received in its last private fundraising in 2021.
Based on the number of shares outstanding immediately after the IPO, the price implies a market capitalization of $5.4 billion. The value, including options likely to be exercised, is $6.4 billion.
In total, the IPO raised $519 million for Reddit and another $229 million for existing shareholders who sold shares in the sale.
Demand for the IPO surged during the roadshow, resulting in Reddit shares being oversubscribed more than 10 times, according to people familiar with the deal.
Trading is scheduled to begin on the New York Stock Exchange on Thursday.
Reddit's IPO gained attention as the first high-profile company to go public in a quiet market over the past two years. It is seen as a test of appetite for potential listings for the rest of the year.
Reddit, based in San Francisco, has tightened its lenient moderation policies in order to build up its advertising business, which accounted for most of its $804 million in sales last year, but has never turned an annual profit. Reddit posted a loss of $91 million in 2023, according to regulatory filings.
