The recent move from Reddit to price its initial public offering (IPO) at $34 a share above its target range has done wonders for the company, as it raised a total of $748 million.
It effectively raised the company's valuation amidst the Federal Trade Commission (FTC) inquiry into its sale of AI data for model training to Alphabet's Google.
It does not yet include the numbers that it reserved for the Redditors, moderators, board members, and more who are eligible to purchase shares from the company.
Reddit IPO's $34 a Share Raised $748 million
Reuters reported that Reddit's recent pricing on its IPO raised a massive $748 million as the company and its existing shareholders sold 22 million shares at $34 each. This centers on a higher pricing for its IPO, more than its top targeted range of $31 this Wednesday.
This move allowed the company to significantly boost its IPO and suggests a significant change in the tech IPO landscape moving forward.
Reddit's gross proceeds also saw a raise of as much as $519.4 million from its IPO, alongside its 8 percent total shares that are reserved for eligible users, moderators, board members, employees, directors, and more.
Reddit's Valuation Soard Amidst FTC Probe
Thanks to its IPO, Reddit's valuation is now at $6.4 billion. This is already lower than expected, as it was valued at $10 billion in a private fundraising round in 2021.
It also came as the company faced an FTC probe regarding its deal with Alphabet's Google, centering on the sale of the social media platform's data for Big Tech's AI model training for $66 million. Reddit feared that this would cost them dearly, incur substantial costs, and lead to regulatory fines.
Reddit and its Massive IPO
The ongoing IPO of Reddit has helped the company grow more of its entirety, and many are backing it in its quest to go public amidst massive challenges since its launch in 2005.
Earlier this year, the company filed for its IPO and began the process of going public, and one of the most significant moves was to offer company stocks to its users and moderators, reserved specifically for eligible ones.
Before this move, there were massive speculations behind its IPO as the many changes on Reddit took effect, including bombarding users with personalized ads to grow more revenue.
This followed the platform's recent API change, which charged Redditors, moderators, developers, and others for their access to the long-time free experience of building apps and other features.
Despite Reddit's struggles since its launch and the API change, the company was valued at $10 billion in 2021, which indicated this recent move to offer its IPO at the top of its target range.
From $31 to $34, the company sold 22 million shares and garnered $748 million from its recent offerings, marking a new track for the tech IPO market.
