Wall Street This Thursday it will receive a new release on the stock market. This is Reddit, a social network that will arrive with the ticker RDDT with a valuation of almost US$6.5 billion, landing at the highest price of the range proposed in the operation brochure. US$34 per share.
Reddit had initially forecast a share price between $31 and $34. However, the valuation figure is well below 10 billion dollars which it raised in a private fundraising round in 2021.
As explained by the company in a statement, of the total 22 million Class A common shares, 15,276,527 are being sold by Reddit and 6,723,473 of which are being sold by certain selling shareholders.
“Reddit will not receive any proceeds from the sale of shares by the selling shareholders. Additionally, it has granted underwriters a 30-day option to purchase up to an additional 3,300,000 shares of its Class A common stock at the initial public offering price, less underwriting discounts and commissions.”
Morgan Stanley, Goldman Sachs, JP Morgan and BofA Securities They act as main managers of the offer. Citigroup, Deutsche Bank Securities and MUFG are acting as joint book-running managers. Citizens JMP, Needham & Company, Piper Sandler, Raymond James, Academy Securities, Loop Capital Markets, Ramirez & Co and Telsey Advisory Group serve as co-managers.
Reddit: the second social network to operate on the stock market
Reddit’s market debut this Thursday will be the first in a large social media company since Pinterest debuted in 2019. In fact, the more than two years it took for Reddit to go public reflects the ups and downs of the market.
Since its launch in 2005, the company has never made annual profits. In its 2023 closing results, Reddit recorded losses of nearly $91 million, compared to red numbers of $158.6 million in 2022. Reddit’s largest shareholder is Advance Magazine Publishers, part of the Reddit publishing empire. Newhouse family that owns Conde Nast, which bought Reddit in 2006 and spun it off in 2011.
Reddit: key data on your business balance sheet
As part of the quoting process, reddit reported that at the end of last year it recorded losses of 90.8 million dollars (83.5 million euros), compared to the ‘red numbers’ of 158.6 million dollars (146 million euros) in 2022, while that the Annual revenues totaled 804 million dollars (739 million euros), 21% more, and the gross margin increased to 86% from 84% in 2022. Likewise, the platform reported that the number of active monthly users was 267.5 million, while the Daily active users data was 73.1 million.
Source: Ambito
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