Reddit IPO raises $748 million as it sells in-demand shares

The Reddit app icon is seen on a smartphone on Feb. 28, 2023.
The Reddit app icon is seen on a smartphone on Feb. 28, 2023. Copyright Matt Slocum/AP
Copyright Matt Slocum/AP
By Eleanor Butler
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Social platform Reddit has priced its shares at the top of a market range, bringing the firm's value to $6.4 billion (€5.9 billion).


Reddit shares will be listed on the New York Stock Exchange on Thursday, ushering in a new era for the social discussion site as it becomes a public company.

The IPO has raised $229 million for existing shareholders and $519 million for Reddit, a total of $748 million (€685 million).

The social platform will still have to pay commissions and other costs associated with the listing, meaning it won't receive all of the $519 million.

Twenty-two million shares are being offered by Reddit and stockholders for $34 (€31) each, and bankers have a 30-day window to sell 3.3 million extra shares that would raise an additional $112 million (€103 million).

The numbers make Reddit's listing one of the biggest IPOs launched by a social media firm, although the platform has a mixed track record.

Reddit is valued at $6.4 billion (€5.9 billion), making it a small player next to other social giants, and the company has never made an annual profit, recording a loss of $91 million (€83 million) last year.

Going forward, the firm is hoping to boost its revenue by diversifying income streams.

Options include improving its advertising business and selling its data to AI groups.

Demand for Reddit's shares has been building since news of the IPO broke, and those familiar with the deal say that the stock is now more than 10 times subscribed.

In an unusual move, the company is favouring users of its platform by giving them the opportunity to buy stock, although IPOs are usually only available to institutional investors.

Reddit has set aside up to 1.76 million of the 15.3 million shares it is offering in the IPO for those who use the site. 

That said, some are concerned that the frenzy surrounding the listing will result in the listing becoming "meme stock", and a number of Reddit users are saying they will short sell the securities.

This means that they will buy expensive shares and immediately sell them, hoping the price will fall so they can buy them back for a lower price.

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