Reddit priced its shares on Wednesday at $34 per share, the top of the expected range, a sign that investors are excited about the company’s initial public offering on Thursday. The social media giant raised nearly $500 million in the offering.
Excluding employee stock options, the 19-year-old company’s valuation will start at $5.4 billion, a far cry from its last private market value of $10 billion, set in August 2021, the peak of the last boom. of technological markets.
The stock, which is the most anticipated offering of the year so far, will debut on the New York Stock Exchange on Thursday under the symbol “RDDT.”
If Reddit’s stock jumps on its first day of trading, other venture capital-backed companies waiting in the wings will surely launch their IPO processes soon after.
Astera Labs, which offers connectivity hardware for computing data centers, rose 72% in its first day of trading on Wednesday, a strong sign that public markets are ready for new publicly traded companies.
Despite being profitable in terms of EBITDA, Instacart and Klaviyo, two leading 2023 IPOs, had a lukewarm reception on Wall Street last year.
But Reddit continues to generate Net losses of more than 90 million dollars.which may bode poorly for the company’s shares amid the search for profitability for newly listed companies.
However, investors may consider Reddit participation in the rise of AI attractive. The company recently began selling its data to Google to train AI models and more similar licensing deals may be in the works, which could become a big revenue growth channel for the business. The company sold contracts worth $203 million to artificial intelligence companies to access its data in January, according to a recent presentation.