Reddit, the popular social media platform, is set to become a publicly traded company with a market value of $6.4 billion. The initial public offering has been priced at $34 per share, at the top of the target range set by investment bankers. Reddit will trade on the New York Stock Exchange under the ticker symbol RDDT, with hopes of raising $748 million by selling 22 million shares.
This valuation represents a drop from $10 billion in 2021 during a private funding round. However, the IPO was four to five times oversubscribed before its debut, which is a positive sign for the desired valuation. The largest shareholder of Reddit is Advance Publications, the parent company of Condé Nast.
Reddit boasts approximately 267 million weekly average users and vast amounts of posts. However, the company has recorded a net loss each year since its debut in 2005. In an effort to seek new revenue opportunities, Reddit has recently made a deal with Google for AI training on user posts.
There is some concern among users and moderators that platform users may negatively affect the stock price. Some IPO shares have been reserved for Reddit users, including unpaid moderators. Reddit CEO Steve Huffman has faced backlash from users over revenue-increasing attempts, such as the decision to charge for API access, which resulted in thousands of subreddits being shut down last year in protest and affecting the culture of the social network.
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