Reddit, the social media platform, is set to debut on the New York Stock Exchange at the top end of its guidance at US$34 per share.
This gives the company a fully diluted valuation of US$6.4 billion, well below the US$10 billion it was valued at when it went through a private fundraising back in 2021.
Immediately after the IPO, the number of outstanding shares indicates that Reddit will initially have a market capitalisation of US$5.4 billion, with options bringing this figure to the US$6.4 billion mark.
The IPO has raised US$519 million for Reddit, while an additional US$229 million has been generated through shareholder sales.
Some 2 million shares, worth US$68 million, have been dished out to the social media sites’ most loyal users and moderators.
Reddit shares are believed to be more than ten times oversubscribed as demand continued to grow during its IPO roadshow, reports revealed.
Ipek Ozkardeskaya, an analyst at Swissquote Bank said: “Fundamentally, Reddit is not Nvidia, they haven’t had a profitable year since the 2005 launch and the monthly user growth has stalled near 500 million for the past three years.
“Note that the weather conditions are ideal for a first day facing the public – especially for speculative trades. The Fed has been accommodative, risk appetite is strong and there are no clouds in the sky. So, the Redditers could enjoy the ride.”