Reddit Prices IPO at Top of Range
At $34 a share, the social-media company would be worth around $6.4 billion
Reddit priced its initial public offering at the high end of its targeted range, a sign that investor enthusiasm could be returning for new issues.
Reddit, set to debut Thursday under the ticker “RDDT,” priced its shares at $34 a piece Wednesday, people familiar with the matter said. That would give the social-media company a valuation of around $6.4 billion. That is at the top of where Reddit expected to be valued in the offering, but below the $10 billion valuation it reached in 2021.
The warm reception for Reddit and technology company Astera Labs ALAB 72.31%increase; green up pointing triangle, which had a successful IPO Wednesday, suggest the beleaguered IPO market of the past two-plus years could be turning a corner.
Astera’s shares closed up more than 70%. Astera—which makes semiconductor-based connectivity solutions that companies use to build cloud and artificial intelligence infrastructures—had priced its IPO on Tuesday two dollars above its targeted price range.
Reddit placed a big chunk of its IPO in the hands of its most prolific users and also reserved a portion for individual investors, an unusual move that could make the stock more volatile. The company set a relatively conservative price range for the offering, in part because it was cognizant that its loyal users would be buying the stock at the IPO price, people familiar with the matter said.
Many of Reddit’s users are bearish on the stock’s prospects, though it remains to be seen how much those outspoken users could influence the stock’s price, if at all.
Redditors on the company’s infamous WallStreetBets message board and other subreddits, communities within Reddit focused on specific topics, have posted in recent weeks that they plan to avoid buying Reddit’s stock and may even bet against it by way of shorting the company.
Reddit is set to trade on the New York Stock Exchange. While a strong pricing doesn’t guarantee Reddit’s stock will trade well, it is typically an encouraging sign.