The much-anticipated Reddit IPO is here. The message board site priced its IPO at $34 per share on Wednesday, raising $748 million and achieving a valuation of $6.4 billion.
The 19-year-old social media platform, with an average of 73.1 million daily active users, is set to trade on the NYSE under the ticker ‘RDDT’ today.
Reddit sold 15.28 million shares while existing shareholders sold 6.72 million in the IPO yesterday. Around 8% of the shares were reserved for the platform’s leading moderators and users, certain board members, and employees’ friends and family.
Despite a private market valuation of $10 billion in 2021, Reddit’s value decreased due to market conditions, prompting a focus on profitability over growth.
The company faces competition in online advertising from industry giants like Alphabet and Meta and other platforms such as Snapchat, Pinterest and Twitch.
Reddit’s revenue increased by 20% in 2023 to $804 million, with a net loss of $90.8 million, an improvement from the previous year.
The company aims to generate revenue through data licensing. It recently signed a $60 million partnership with Google, allowing access to Reddit data for AI training.
Reddit’s data-licensing practices have drawn scrutiny from the FTC.