Reddit's debut delivers for new and old shareholders alike
BNN Bloomberg
Reddit Inc.’s first-day jump fattened the wallets of the social media platform’s users who were given the unusual opportunity to buy shares at the initial public offering price as well as longtime investors benefiting from the rebound in the company’s valuation.
Touting its plan to profit from the growth of artificial intelligence, Reddit’s shares climbed 48 per cent in its trading debut Thursday after pricing at the top of a marketed range to raise US$748 million in the fourth-largest U.S. IPO of the year. The stock was lower by as much as five per cent in premarket trading on Friday.
At the closing price of $50.44, San Francisco-based Reddit has a market value of $8 billion. Including stock options and restricted share units, the company’s fully diluted valuation is closer to $9.5 billion, based on filings with the U.S. Securities and Exchange Commission. That’s about $3 billion more than its valuation in Tuesday’s share sale and just shy of the $10 billion figure it had achieved in a 2021 funding round.
The strong showing by Reddit, along with AI-focused semiconductor connectivity company Astera Labs Inc. whose shares have gained 78 per cent since its IPO Tuesday, provides a promising market check for other IPO candidates such as Microsoft Corp.-backed data security startup Rubrik Inc. and health-care payments company Waystar Technologies Inc.
