Reddit has priced its IPO at $34 per share. The online message board operator is set to raise roughly $748 million from the initial offering of 22 million shares. The company’s shares will begin trading on the NYSE under the ticker (NYSE:RDDT) today.
Out of the 22 million shares on offer, nearly 15.28 million shares are being sold by Reddit, and around 6.72 million shares are being sold by certain selling shareholders. Leading Wall Street names such as Goldman Sachs (NYSE:GS), J.P. Morgan (NYSE:JPM), Bank of America (NYSE:BAC), and Morgan Stanley (NYSE:MS) are the lead book-runners for the IPO. Additionally, underwriters have been given a 30-day option to acquire up to 3.3 million additional shares in the company.
Reddit has more than 100,000 active communities and over 73 million daily active unique visitors. The popular platform has priced its IPO at the top of the marketed range of $31 to $34. While the fully diluted valuation for the company now comes at around $6.4 billion, the figure is still a far cry from its $10 billion valuation in a funding round around three years ago.
According to Bloomberg, Reddit churned out a net loss of $91 million on $804 million in revenue last year. In comparison, it had incurred a net loss of $159 million on revenue of $667 million in 2022.
What Stocks Does WallStreetBets Recommend?
Interestingly, Reddit’s share price could face a potential threat from the platform’s own users. Reportedly, some members on the WallStreetBets forum, where members discuss potential stocks and options ideas, are in favor of shorting Reddit shares upon listing owing to the company’s lack of profitability. The platform has reserved around 8% of the shares on offer for its users and moderators.
Some popular names on Reddit’s WallStreetBets Forum include Virgin Galactic (NYSE:SPCE), Palantir (NYSE:PLTR), Tesla (NASDAQ:TSLA), and SoFi Technologies (NASDAQ:SOFI). The TipRanks Comparison Tool indicates a potential downside of 20% in Palantir shares after a nearly 38.6% runup in the company’s share price so far this year.
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