RDDT: Reddit Shares to Start Trading at $34 as IPO Seeks to Gauge Investor Appetite

Social media stock flotation was priced at top of range, signaling high expectations and valuing the company at $6.4 billion.

Key Points:

• Reddit shares to debut at $34 a piece.
• Company gets a $6.4 billion valuation.
• WallStreetBets remains a big threat.
• Reddit stock is poised to debut in public markets today with its shares hitting the New York Stock Exchange at $34 a pop. The social media platform will carry the ticker symbol RDDT and flaunt an IPO (initial public offering) valuation of $6.4 billion—the top of the company’s own guidance. A total of 22 million shares will be issued for public ownership, except for an 8% chunk which will go to eligible users and moderators. In the offering prior to flotation, Reddit raised $748 million.
• The funds raised and the top-of-range pricing inflated hopes of a comeback for tech companies at the doorstep of public markets. In that regard, Reddit’s IPO will help grasp investor appetite for social media companies daring to walk out of the private space and open up to outside investors. Some reports bolstered expectations for the IPO, saying Reddit’s stock has been subscribed more than 10 times.
• Now the tricky part. Reddit has never turned a profit in its 18 years’ existence as a private company. It picked up revenue of $804 million in 2023 but realized a loss of $91 million. Also, a rising danger has emerged from within the many chat rooms. WallStreetBets, the infamous trading-centric forum and the birthplace of meme stocks, has not pledged support for the IPO and has threatened to bet against it by shorting the stock.