Social media platform Reddit has priced its upcoming initial public offering in the US between $31 and $34 per share.
Reddit hopes to raise $748 million at the top end of this pricing range by issuing 22 million shares, representing 13.8% of Reddit’s outstanding shares
Hitting this target would give Reddit an approximate valuation of $5.4 billion at the top end of the share price target.
Reddit was valued at $10 billion following a $700 million funding round led by Fidelity in 2021.
“We intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures,” said Reddit in a Securities and Exchange Commission filing.
“We may also use a portion of the net proceeds to in-license, acquire, or invest in complementary technologies, assets, or intellectual property,” it added.
Reddit’s target valuation puts it on a 6.7 times revenue multiple (per 2023 results).
The firm lost $90.8 million in 2023, a significant improvement from more than $158 million in 2022.
Eligible users and moderators who joined before January 1, 2024, are potential candidates for a directed share program, with prerequisites including US residency and a minimum age of 18.
Participants must have a positive standing on the platform and cannot be current or former Reddit employees.
Reddit’s underwriters, which include Morgan Stanley (NYSE:MS), Goldman Sachs and Deutsche Bank, have set aside 1.76 million shares to offer to eligible Reddit users and moderators, plus certain board members and “friends and family members of certain of our employees and directors”.