Reddit priced its initial public offering (IPO) at $34 per share on Wednesday, hitting the high end of its target range.
The offering raised $519 million and values the social media platform at about $6.5 billion. Reddit initially aimed for a share price between $31 and $34.
When Reddit starts trading on the public market this Thursday under the ticker "RDDT," it will be the first significant social media platform to go public since Pinterest (PIN) in 2019. It's also one of the rare venture-backed tech IPOs in the last two years.
The company selling 15.28 million shares in the offering, with existing shareholders selling an additional 6.72 million shares.
The company's value has decreased from its $10 billion valuation during the 202 tech boom as soaring inflation and higher interest rates made investors wary of riskier investments in 2022, leading many startups to cut costs, lower their valuations, and shift their focus towards profitability.
Reddit allocated a significant portion of its IPO shares to its most active users and also made some available to individual investors, an unusual decision that could potentially increase the stock's volatility.
The company opted for a more conservative pricing range, partly to accommodate its dedicated user base which would be purchasing shares at the IPO price, according to the Wall Street Journal.
Despite this, a number of Reddit users, particularly on forums like WallStreetBets, have expressed skepticism about the stock's future performance. There's speculation about whether these vocal users will impact the stock price, with some even considering shorting the company's shares.