Reddit Announces Pricing of Initial Public Offering

Rhea-AI Summary

Reddit, Inc. announces the pricing of its initial public offering of 22,000,000 shares of Class A common stock at $34 per share, with 15,276,527 shares sold by Reddit and 6,723,473 shares sold by selling stockholders. The underwriters have a 30-day option to purchase an additional 3,300,000 shares. The offering is expected to close on March 25, 2024, under the ticker symbol 'RDDT'.

Insights

Market Analyst

The initial public offering (IPO) of Reddit marks a significant event in the technology and social media sector. The pricing of shares at $34 each, with a total of 22 million shares, indicates a substantial capital influx for the company. The fact that Reddit is selling over 15 million shares implies a direct benefit to their balance sheet. However, the proceeds from the remaining shares sold by existing stockholders will not contribute to Reddit's financials.

Investors should note the underwriters' option to purchase an additional 3.3 million shares, which could indicate confidence in the IPO's success or serve as a buffer to stabilize the price post-IPO. The involvement of prominent financial institutions as book-running managers and co-managers could be seen as a vote of confidence in Reddit's market potential.

For stakeholders, the short-term implications involve the market's reception of the IPO and the immediate liquidity it provides to selling stockholders. In the long term, the capital raised will likely be directed towards Reddit's growth strategies, which may include expanding their platform, acquiring new technologies, or scaling their advertising capabilities.

Financial Analyst

From a financial perspective, the key point of interest is the valuation of Reddit at the time of the IPO. The offer price of $34 per share will set the market capitalization of the company, which investors will compare against Reddit's revenue, user base growth and profitability metrics. This comparison will help assess whether Reddit's IPO is priced appropriately relative to its peers in the social media industry.

It is also important to consider the potential dilution of existing shares due to the additional 3.3 million shares option for underwriters. While this may affect the earnings per share (EPS) metric, it could also provide additional capital for Reddit if exercised. Investors should watch for Reddit's post-IPO performance and any strategic moves the company makes with the new capital.

Securities Lawyer

The legal aspect of this IPO is crucial, as the registration statement for these securities has been declared effective by the SEC, ensuring that Reddit has met all regulatory requirements for going public. Investors should understand that the IPO process is highly regulated to protect their interests. The prospectus, which can be obtained from the underwriters, will provide detailed information about Reddit's financials, risks and the terms of the offering.

Additionally, the fact that the offering is not valid in jurisdictions where it would be unlawful highlights the importance of compliance with state and federal securities laws. This compliance is essential for maintaining the integrity of the markets and protecting investor rights.

SAN FRANCISCO--(BUSINESS WIRE)-- Reddit, Inc. (“Reddit”) today announced the pricing of its initial public offering of an aggregate 22,000,000 shares of its Class A common stock, 15,276,527 of which are being sold by Reddit and 6,723,473 of which are being sold by certain selling stockholders, at a public offering price of $34 per share. Reddit will not receive any proceeds from any sale of shares by the selling stockholders. In addition, Reddit has granted the 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. The shares are expected to begin trading on the New York Stock Exchange on March 21, 2024, under the ticker symbol “RDDT.” The offering is expected to close on March 25, 2024, subject to customary closing conditions.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, J.P. Morgan, and BofA Securities are acting as lead book-running managers for the offering. 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., Inc., and Telsey Advisory Group are acting as co-managers.

A registration statement relating to these securities was declared effective by the Securities and Exchange Commission. This offering is being made only by means of a prospectus, copies of which may be obtained, when available, from: Morgan Stanley & Co. LLC, Prospectus Department, 180 Varick Street, New York, New York 10014, or email: prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204, or email: prospectus-eq_fi@jpmorgan.com; and BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, telephone: 1-800-294-1322, or email: dg.prospectus_requests@bofa.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Reddit, Inc.

Reddit is a community of communities. It’s built on shared interests, passion, and trust and is home to the most open and authentic conversations on the internet. Every day, Reddit users submit, vote, and comment on the topics they care most about. With 100,000+ active communities and approximately 73+ million daily active unique visitors, Reddit is one of the internet’s largest sources of information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240320903284/en/

Media Relations

Gina Antonini

press@reddit.com

Investor Relations

Jesse Rose

ir@reddit.com

Source: Reddit, Inc.

FAQ

What is the pricing of Reddit, Inc.'s initial public offering?

Reddit, Inc. priced its initial public offering at $34 per share.

How many shares are being sold by Reddit in the IPO?

Reddit is selling 15,276,527 shares in the IPO.

How many shares are being sold by selling stockholders in the IPO?

Selling stockholders are selling 6,723,473 shares in the IPO.

What is the 30-day option granted to the underwriters?

The underwriters have a 30-day option to purchase up to an additional 3,300,000 shares.

When is the offering expected to close?

The offering is expected to close on March 25, 2024.

Under what ticker symbol will Reddit, Inc. trade?

Reddit, Inc. will trade under the ticker symbol 'RDDT'.