Reddit priced its shares on Wednesday at $34 per share, above the expected range, a sign that investors are excited about the company's initial public offering 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, a far cry from its last private market value of $10 billion, which was set in August 2021, the peak of the last boom in technology markets.
The stock, the most anticipated offering of the year so far, will debut on the New York Stock Exchange on Thursday with the ticker symbol “RDDT.”
If Reddit stock jumps on its first day of trading, other venture capital-backed companies in waiting are sure to launch their own IPOs soon after.
Shares of Astera Labs, which provides connectivity hardware for data computing data centers, rose 72% on its first day of trading on Wednesday, a strong sign that public markets are ready for new publicly traded companies.
Despite being profitable on an EBITDA basis, Instacart and Klaviyo, the two major IPOs of 2023, received a lukewarm reception on Wall Street last year.
But Reddit is still under construction Net losses are more than $90 millionThis may bode poorly for the company's stock amid pressure to achieve profitability for newly traded companies.
However, investors might consider Reddit Participate in the artificial intelligence boom Attractive. The company recently began selling its data to Google to train AI models, and there may be more similar licensing agreements in the pipeline, which could become a big revenue growth channel for the company. The company sold $203 million worth of contracts to AI companies to access its data in January, according to A Last deposit.
