Social media platform Reddit, priced its initial public offering at the top of its targeted range of $31 to $34 per share on Wednesday, raising $748 million and giving the ailing technology IPO market a much-needed boost.
The IPO priced 22 million shares sold by the company and its existing shareholders at $34 a share, giving Reddit a valuation of about $6.4 billion.
Excluding the shares sold by existing shareholders, Reddit raised gross proceeds of $519.4 million.
Reuters reported earlier on Wednesday that Reddit and its bankers were guiding they could price the IPO at the top of the indicated range or above.
The pricing of the IPO at the top of the range is a vindication of the company’s decision to lower its valuation expectations, after it was valued at $10 billion in a private fundraising round in 2021.
The successful offerings of Reddit and Astera Labs, could boost the lackluster tech IPO market after two years of largely subdued activity.
Earlier this year, the stock market launches of other big names including KKR-backed BrightSpring and sportswear brand Amer Sports received a lukewarm reception from investors.
In February, Reddit unveiled a $66 million contract to provide training data to Alphabet’s Google.
Reddit said, last week the US Federal Trade Commission was conducting an inquiry focused on the company’s sale, licensing, and sharing of user-generated content with third parties to train artificial intelligence models.
Reddit’s shares are expected to start trading on the New York Stock Exchange on Thursday under the ticker “RDDT”.
Morgan Stanley, Goldman Sachs, JPMorgan Chase, and Bank of America are the lead underwriters for Reddit’s offering.