NYSE Celebrates Reddit’s $6.4 Billion IPO

Reddit is getting ready to join the New York Stock Exchange, eyeing a $6.4 billion valuation. They’re listing themselves on the exchange as “RDDT,” offering 22 million shares at $31 to $34 each. 

Joining the Stock Exchange

Image Credit: Shutterstock / Xalien

Redditt, one of the world’s largest and most popular social media sites, is looking to become a publicly traded company on the New York Stock Exchange.

The Benefits

Image Credit: Shutterstock / G-Stock Studio

For Reddit, becoming a publicly traded company would have many benefits, such as access to a wider range of funding from investors worldwide and an increase in its visibility and credibility.

Increasing Transparency

Image Credit: Shutterstock / f11photo

However, Redditt going on the New York Stock Exchange would also mean the company would be subject to higher levels of regulatory scrutiny and requirements for transparency since it must now publicly disclose financial, operational, and strategic information on a regular basis.

A Hefty Price

Image Credit: Shutterstock / Andrey_Popov

However, the bigger story behind Redditt’s new direction isn’t the fact they want to go public, but rather the price they are looking to be valued at. 

Selling RDDT

Image Credit: Shutterstock / fizkes

Redditt and its investors are hoping to join the New York Stock Exchange with an evaluation of up to $6.4 billion under the ticker symbol “RDDT.”

22 Million Shares

Image Credit: Shutterstock / ElenaR

In a recent Securities and Exchange Commission filing, Reddit revealed that it is looking to sell 22 million shares in its initial public offering (IPO), with a price range between $31 and $34 per share.

The Plan

Image Credit: Shutterstock / Bro Crock

If Reddit’s big reveal to the New York Stock Exchange goes as planned, it could raise as much as $748 million.

Where the Shares Go

Image Credit: Shutterstock / only_kim

Out of the 22 million shares they plan on listing, Reddit wants to sell about 15.3 million on the stock exchange directly, while the remaining shares will be offered to Reddit employees and investors.

A Noticeable Decrease

Image Credit: Shutterstock / Leonid Sorokin

The $6.4 billion IPO would also mark a notable decrease in Reddit’s $10 billion valuation in a private funding round in August 2021, even though analysts at New Street Research suggested a base case valuation of $10.4 billion.

Reserved for Users

Image Credit: Shutterstock / View Apart

For Reddit users and moderators active on the platform before January 1st, approximately 1.76 million shares, or 8% of the total offering, are reserved.

Bypassing the Usual Lock Up

Image Credit: Shutterstock / koonsiri boonnak

The shares reserved for users will be made available for purchase and immediate resale on the open market, allowing these participants to bypass the usual lock-up period.

Increasing Profits

Image Credit: Shutterstock / PeopleImages.com – Yuri A

For the fiscal year 2023, Reddit reported that its revenue totaled $804 million. This would mark a 20.6% increase from the previous year, with the increase being primarily driven by advertising. 

Google and Reddit

Image Credit: Shutterstock / SFIO CRACHO

The company also benefits from a content licensing agreement with Alphabet’s Google, which has been reported to be worth $60 million annually.

Winning While Losing

Image Credit: Shutterstock / Adam Gregor

However, despite the revenue growth seen in 2023, Reddit experienced a net loss of $90.8 million in 2023, which is actually an improvement from the $158.6 million net loss in 2022.

Significant Shareholders

Image Credit: Shutterstock / Pressmaster

Tencent, Advance Magazine Publishers (the parent company of Condé Nast), and Sam Altman, the CEO of OpenAI, who served on Reddit’s board from 2015 to 2022, are the most significant shareholders looking to profit from and influence this decision.

Creating Communities

Image Credit: Shutterstock / ASDF_MEDIA

As a social media network, Reddit is best known for its user-generated content and forums, which cover a broad range of topics to create a community around the subject and distinguish Reddit from other social media platforms. 

Gamestop Stock

Image Credit: Shutterstock / Hryshchyshen Serhii

This community aspect has enabled users to organize massive groups to mobilize for various causes, such as the GameStop stock trading event in 2021, during which the price was driven up to challenge hedge funds that attempted to short it.

Worried Users

Image Credit: Shutterstock / GaudiLab

Despite the company’s eagerness for this change, Reddit users are concerned about the potential shift in focus from user satisfaction to maximizing shareholder profits following the IPO.

Experts Watching

Image Credit: Shutterstock / fizkes

Experts are closely watching the outcome of Reddit’s IPO and its subsequent performance to view them as indicators of the health of the IPO market.

This seems to be the result of other technology and consumer brand IPOs in recent periods underperforming.

23 Steep Taxes Adding to California Residents’ Burden

Image Credit: Shutterstock / Alex Millauer

California: a place of sunshine, innovation, and, unfortunately, some of the nation’s highest taxes. From LA’s beaches to Silicon Valley’s tech hubs, residents grapple with a maze of state taxes. Here’s a glance at 23 taxes that might surprise both Californians and outsiders. 23 Steep Taxes Adding to California Residents’ Burden

Cash in on Nostalgia: 21 Toys Now Worth a Fortune

Image Credit: Shutterstock / Kostikova Natalia

Time to dust off the boxes and find that once-cherished toy from your childhood. For collectors and enthusiasts, these items have become valued objects, and they can be worth big bucks – are there any of these in your attic? Cash in on Nostalgia: 21 Toys Now Worth a Fortune

Millennials Don’t Buy These 19 Products Anymore

Image Credit: Shutterstock / mariakray

Millennials are changing consumer habits, quietly replacing once-staple products and traditions. Often criticized for their disruptive preferences, this generation is reshaping the marketplace with digital expertise, ethical buying, and a taste for the unconventional. Millennials Don’t Buy These 19 Products Anymore

The post NYSE Celebrates Reddit’s $6.4 Billion IPO first appeared on Thrift My Life.

Featured Image Credit: Shutterstock / Maurizio De Mattei.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.