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Reddit has set its IPO price at $34 per share, achieving its desired $6.4 billion valuation. This came amidst mixed sentiments from the investor community, particularly the vocal r/wallstreetbets forum.
Reddit, the popular online platform known for its vibrant communities and spirited discussions, announced its initial public offering (IPO) price. It is at the higher end of its expected range, targeting a valuation of $6.4 billion.
This marked a significant moment for social media, making it the most notable IPO since Pinterest in 2019. The shares will debut on the New York Stock Exchange under the symbol RDDT on March 21. The company offers around 22 million shares to the public.
Reddit Community Reacts Poorly
Despite the achievement, not all responses have been positive. The r/wallstreetbets subreddit, infamous for its role in the GameStop stock frenzy, has voiced skepticism.
A popular post on the forum criticizes the IPO as a potential “pump and dump” scheme, attracting over 2,300 upvotes. Additionally, many users desire to short the stock, betting against Reddit’s post-IPO performance due to its historical lack of profitability.
Reddit’s Long Road to IPO
Reddit’s journey to going public has not been without its challenges. Initially valued at up to $15 billion in late 2021, the company faced delays in its IPO plans amid fluctuating market conditions and rising interest rates. However, it pushed forward, officially filing for the IPO last month despite revealing a deficit of $716.6 million by the end of 2023 and no profitable year since its inception 18 years ago.
Critics on Reddit have warned potential investors about the risks of investing in a company that has yet to profit. Yet, a subset of the investment community remains willing to bet on Reddit’s future growth, comparing it to the early, unprofitable days of now-successful companies like Tesla and Amazon.
The broader investment world watches closely as Reddit prepares to enter the public market. The platform’s performance in the coming days could serve as a litmus test for the viability of social media IPOs and the influence of investor sentiment forums like r/wallstreetbets on market outcomes.
