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Social media company Reddit has priced its shares at $34 ahead of its expected public debut in New York on Thursday, coming in at the top of previous price guidance, giving it a fully diluted valuation of $6.4bn, according to people familiar with the matter.
It puts Reddit’s valuation well below the $10bn it received at its last private fundraising in 2021.
Based on the number of shares outstanding immediately after the IPO, the price implies a market capitalisation of $5.4bn. Including options that are likely to be exercised, the value reaches $6.4bn.
In total the IPO raised $519mn for Reddit and a further $229mn for existing shareholders who sold stock in the sale.
Demand for the IPO had built during its roadshow, resulting in Reddit’s stock being more than 10 times subscribed, according to people familiar with the deal.
Trading is set to begin on the New York Stock Exchange on Thursday.
Reddit’s IPO has gained attention as the first high-profile company to go public in an otherwise quiet market over the past two years. It is viewed as a test for appetite for potential listings for the rest of the year.
San Francisco-based Reddit has tightened its once lax moderation policies in order to build up its advertising business, which accounted for most of its $804mn in sales last year, but it has never made an annual profit. Reddit posted a $91mn loss in 2023, according to regulatory filings.
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