New York, NY – Reddit is set to make its debut on the New York Stock Exchange on Thursday with a market value of $6.4 billion. The social media platform’s initial public offering price was set at $34 per share, marking a significant milestone as the largest IPO by a social media company in recent years.
The announcement of the IPO price, at the top end of the target range determined by Reddit’s investment bankers, signals strong investor demand for the stock. With 22 million shares set to be sold, Reddit aims to raise $748 million with this IPO.
Despite recording a net loss each year since its establishment in 2005, Reddit has amassed approximately 267 million weekly average users, solidifying its position as one of the largest social networks and content platforms. The company’s IPO filing revealed a treasure trove of over 1 billion posts and more than 100,000 active subreddits.
In an effort to mitigate yearly losses and explore new revenue streams, Reddit has engaged in partnerships like the one with Google to leverage its vast user-generated data for AI model training. This strategic move is intended to foster growth and diversify revenue sources beyond traditional advertising.
However, concerns have been raised by investors and Reddit executives regarding the potential impact of user behavior on the stock price. A portion of the IPO shares were reserved for Reddit users, including moderators, with no obligation to retain their shares, leading to apprehensions about potential sell-offs that could influence stock performance.
Reddit’s chief executive, Steve Huffman, has faced backlash from users and moderators for attempts to increase revenue, with past decisions resulting in subreddit shutdowns and protests. Despite these challenges, Reddit’s IPO marks a significant milestone in its evolution as a publicly traded company, poised to navigate new opportunities and challenges in the stock market.