Reddit is divided into about 100,000 topic-based chat rooms called subreddits, making it more specialized and a place where posts are less prone to going viral (MARIO TAMA)
Social network Reddit was set to make its trading debut on Thursday after setting a robust price for an initial public offering that signaled greater investor enthusiasm for new stock issuers.
Reddit is set to debut on the New York Stock Exchange on Thursday under the ticker symbol RDDT after completing an initial public offering priced at $34 per share, the company said in a statement on Wednesday, valuing the platform at around 6, would have $4 billion.
Reddit's entry comes as the tech sector has seen a sharp slowdown in initial public offerings since the Federal Reserve began raising interest rates.
Since easy financing options are scarce, there is a lack of companies in Silicon Valley that are willing to take the big step to go public. Pinterest was the last social media company to do this in 2019.
San Francisco-based Reddit first filed to go public in 2021 when the market was hot thanks to a Covid-related tech growth boom, but the attempt stalled as the internet economy cooled.
Reddit is – in contrast to Facebook or
Still, Reddit has an average of 73 million daily users and 267 million monthly users, mostly in the United States, according to its filing with U.S. regulators.
Content in subreddits is largely independently moderated, with the site requiring a basic standard that users must adhere to, making it less monitored or centralized than Facebook or TikTok.
In its filing earlier this month, the company said it would issue 15.2 million shares at a price between $31 and $34.
Reddit followed the example of companies like Airbnb and Rivian and allocated about 8 percent of the IPO shares to moderators and top users, so-called “Redditors.”
– Future profits? –
There are many questions about whether Reddit will be a successful company, and the company has never made a profit in its two decades of existence.
Reddit is supported by loyal but often unruly users and is not considered fertile ground for expanding advertising, which will be the company's main way of making money.
The story goes on
Reddit was founded in 2005 and was quickly sold to Conde Nast, publisher of Vogue and New Yorker magazines, in an unlikely pairing.
In 2011, Reddit was spun off, although Conde Nast's parent company, controlled by the Newhouse family, remains its largest shareholder.
OpenAI CEO Sam Altman is also a major investor, having led a fundraising campaign about a decade ago.
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