Social Media Platform Reddit Raises $748 Million

The San Francisco-based social media platform Reddit, Inc. on Wednesday announced the pricing of its initial public offering (IPO) of an aggregate 22 million shares of its Class A common stock, 15,276,527 of which are being sold by Reddit and 6,723,473 of which are being sold by certain selling stockholders, at a public offering price of $34 per share raising $748 million.

Reddit will not receive any proceeds from any sale of shares by the selling stockholders. In addition, Reddit has granted the underwriters a 30-day option to purchase up to an additional 3,300,000 shares of its Class A common stock at the initial public offering price, less underwriting discounts and commissions.

The shares are expected to begin trading on the New York Stock Exchange later today (US time) and the offering is expected to close on 25 March 2024, subject to customary closing conditions, the company said in an overnight statement.

Morgan Stanley & Co., Goldman Sachs & Co., J P Morgan, and Bank of America (BofA) Securities are acting as lead book-running managers for the offering. Citigroup, Deutsche Bank Securities, and MUFG are acting as joint book-running managers. Citizens JMP, Needham & Company, Piper Sandler, Raymond James, Academy Securities, Loop Capital Markets, Ramirez & Co., Inc., and Telsey Advisory Group are acting as co-managers.

A registration statement relating to these securities was declared effective by the Securities and Exchange Commission.

Reddit is a community of communities and built on shared interests, passion, and trust and is home to the most open and authentic conversations on the internet. Every day, Reddit users submit, vote, and comment on the topics they care most about.

With 100,000+ active communities and approximately 73+ million daily active unique visitors, Reddit is one of the internet’s largest sources of information.

According to a Bloomberg report, the company is setting aside around 8% of the shares on offer for users and moderators who had accounts before the start of the year, along with employees’ friends and family and some board members.

At the IPO price, Reddit has a market value of $5.4 billion based on the outstanding shares listed in its filings with the US Securities and Exchange Commission (SEC). Including stock options and restricted share units, Reddit’s fully diluted valuation is closer to $6.4 billion. That’s down from $10 billion in a funding round in 2021, when Reddit first launched its IPO plans, according to Reuters.

The listing follows the $713 million Astera Labs Inc. offering by one day. Astera, a semiconductor connectivity company focused on artificial intelligence, priced its shares above its marketed range and then jumped 72% in its trading debut Wednesday.

This year, almost $8.7 billion has now been raised via IPOs on US exchanges, the data show. That’s an increase of about 150% at this point last year, Reuters added.