Reddit sets IPO price at $34 per share, top of range

[ad_1]

Reddit priced its stock at $34 a share on Wednesday, topping the anticipated range, a sign that investors are excited about the company's IPO on Thursday. The social media giant raised nearly $500 million in the offering.

Excluding employee stock options, the 19-year-old company's valuation would start at $5.4 billion, far below its previous private markets valuation of $10 billion, set in August 2021, the peak of the last tech markets surge .

The stock, which is the most anticipated offering of the year so far, will debut on the New York Stock Exchange on Thursday with the ticker symbol “RDDT.”

If Reddit's stock soars on its first day of trading, other VC-backed companies waiting in the wings will surely begin their IPO processes soon.

Astera Labs, which provides connectivity hardware for data computing data centers, surged 72% in its first day of trading on Wednesday, a strong sign that public markets are ready for new publicly traded companies.

Despite being profitable on an EBITDA basis, Instacart and Klaviyo, the two main IPOs of 2023, received a tepid response on Wall Street last year.

But Reddit is still producing Net loss of over $90 millionWhich could be a bad sign for the company's stock amid profitability pressure for newly traded companies.

However, investors may consider Reddit's Participation in AI boom Attractive. The company has recently started selling its data to Google for training AI models and there may be more similar licensing agreements in place, which could become a huge revenue growth channel for the business. The company sold $203 million worth of contracts to AI companies for access to its data in January recent filing,