(New York) The social network Reddit is preparing to be listed on the New York Stock Exchange on Thursday after setting its share price at the top of the range, which should value the group at $6.4 billion.
Reddit received approval from the New York Stock Exchange on Wednesday for its listing, which traditionally comes the day after this final green light.
Its entry price will be $34 per share, Reddit said, which will allow it to raise more than $748 million in new money.
This is the first listing of a social network on the New York Stock Exchange since Pinterest in 2019.
The San Francisco company explained that it wanted to issue 15.2 million new securities, at a price of $34 per share while the initial estimate fluctuated between $31 and $34.
To this will be added 6.7 million shares sold by existing shareholders, as well as 3.3 million shares set aside by partner banks in the event of significant demand (over-allotment).
In total, around 25.3 million securities were to be placed.
Including the stock options already issued, the group will then be valued at around $6.4 billion.
100,000 forums
The listing of the platform known for its discussion forums is an important test for the IPO market, which has been slowing down since a surge in September 2023.
In documents filed with the US financial markets regulator, the SEC, Reddit mentions having 73 million daily active users on average and more than 267 million weekly users.
Despite its success with the public, the platform with 100,000 forums (concerning celebrities, video games, social issues or even businesses) has never managed to make a profit.
Like Facebook, Instagram, YouTube or TikTok, its economic model is based on advertising but the revenue it earns from it is incommensurate with that of its major rivals.
In 2023, Reddit generated $804 million in revenue, an increase of 20.5% from the previous year. But it lost $90.8 million that year, compared to $158.6 million in 2022.
The platform also intends to grow its revenues through contracts giving access to public data on its site, very popular with artificial intelligence (AI) companies, which use it to develop their interfaces.
“Being listed allows us to raise capital and provide liquidity to our employees who have worked tirelessly to build Reddit,” wrote Steve Huffman, co-founder of the company, in a letter attached to the prospectus filed with the SEC in February .
Created almost 20 years ago by two students from Virginia (eastern United States), the social network was bought in 2006 by Condé Nast, publisher of magazines Vogue, The New Yorker And Vanity Fair.
The company became an independent subsidiary in 2011, but Advance, Condé Nast’s controlling company, is still the largest shareholder.
Sam Altman, boss of OpenAI – creator of the generative artificial intelligence software ChatGPT – is one of Reddit’s most important investors. He led a fundraiser in 2014 and briefly headed the social network.