Reddit raised $748 million in an IPO

Reddit raised $748 million in an IPO

The social platform Reddit summed up the results of the IPO. The placement passed the upper limit of the previous price range ($31–34). The shares will begin trading on the New York Stock Exchange (NYSE) on March 21, 2024 under the ticker RDDT.

Shareholders sold 22 million shares of Reddit and raised a total of $748 million. Reddit also granted the underwriters a 30-day option to purchase up to 3.3 million additional shares at the IPO price.

According to Bloomberg, the capitalization of the platform was $5.4 billion, and taking into account options and restricted shares, about $6.4 billion. This is significantly less than in 2021, when Reddit was able to raise $1.3 billion and was valued at $10 billion during the round financing.

About 8% of the IPO shares will also be allocated to Reddit moderators who created accounts before January 1, as well as some members of the board of directors. These shares will reportedly not be subject to lock-up, meaning that holders will be able to sell them on the opening day of trading.

According to Bloomberg data, in the fourth quarter of 2023, Reddit had 73.1 million unique visitors per day. The company reported a net loss of $91 million in 2023 on revenue of $804 million. By comparison, Reddit reported a loss of $159 million on revenue of $667 million a year earlier. Reddit’s largest shareholder, Advance Magazine Publishers, part of the Conde Nast publishing empire, bought Reddit in 2006.

Reddit caught the attention of investors and analysts in 2021 thanks to the WallStreetBets subreddit. Its participants artificially inflated the prices of some stocks, including the securities of the AMC movie theater chain and the GameStop store, which caused the stock to rise by hundreds of percent.

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