Reddit on Wednesday priced its shares at $34 for its initial public offering, at the high end of expectations, in a sign of investor demand for growing tech companies.
The San Francisco-based social media company had estimated that its shares would be priced at $31 to $34. The $34 price put Reddit’s value at $6.4 billion, below the $10 billion valuation it fetched in a private fund-raising round in 2021. The company raised $748 million in the offering.
Its shares will begin trading on Thursday on the New York Stock Exchange under the ticker symbol RDDT.
The pricing was a favorable signal for start-ups and venture capitalists, who have been closely watching Reddit’s offering as a test for private tech companies angling to brave the public markets. Activity has been slow, with just over 100 companies going public in the United States last year, roughly a quarter of the number that went public in 2021, according to data compiled by Renaissance Capital, which manages exchange-traded funds that focus on I.P.O.s.
“There was some concern over the demand for tech heading into 2024,” said Matt Kennedy, a senior strategist at Renaissance Capital. But Reddit’s pricing, alongside a successful first day of trading on Wednesday for Astera Labs, an artificial intelligence company, was a “good sign for the rest of the pipeline,” he added.
Shares of one of last year’s hottest tech company debuts — Instacart, the grocery delivery company — are up roughly 58 percent this year. Shares of Arm, a chip designer that also went public last year, are up about 90 percent in the same period.
