Reddit, a popular social media platform, is set to become a publicly traded company with a market value of $6.4 billion. The initial public offering has priced its shares at $34 each.

On Wednesday evening, Reddit’s investment bankers announced a price that was at the upper range of their target. During the last few weeks, they had been determining the interest of investors in purchasing the company’s stock. This sets the scene for the company’s shares to be available for trading on the New York Stock Exchange starting Thursday, using the ticker symbol “RDDT”. This debut is expected to generate a lot of discussion on Reddit’s platform and other social media platforms.

The reason why Reddit receives so much attention is due to its extensive user base that frequently uses the platform to engage in discussions about a variety of topics, from humorous memes to deeper existential concerns. It is also a popular place to seek recommendations from those with similar interests.

However, compared to other companies in the tech industry, Reddit’s size remains relatively small despite being established in 2005.

The parent company of Facebook, Meta Platforms, has a market value of over $1.2 trillion and brings in an annual revenue of $135 billion. Comparatively, Reddit, which was launched only 18 months after Facebook, has a market value below $1 billion.

However, there’s an issue to consider: Reddit has not made a profit despite its widespread presence, and instead has accumulated a total loss of $717 million. This amount has increased from $467 million in December 2021, when the company initially tried to go public but ultimately backed out.

In the newly submitted IPO documents, Reddit explained that its losses were a result of its recent emphasis on discovering innovative methods to increase revenue.

However, Reddit will now have a larger amount of money available to pursue its plans to broaden its reach and increase its profits.

The initial public offering (IPO) generated approximately $748 million, with $228 million going to Reddit shareholders who chose to sell part of their shares. $519 million is designated for Reddit, but the company will not receive the entire amount due to commissions and other expenses related to the offering. There is still a 30-day period for bankers to sell 3.3 million more shares, potentially raising another $112 million, before factoring in commissions and fees.

Reddit allocated 1.76 million of its 15.3 million IPO shares for its platform users. Following the standard IPO tradition, the remaining shares were predominantly purchased by mutual funds and other institutional investors who have confidence in Reddit’s potential success in the finance industry.

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Source: wral.com