Reddit share sale values social media firm at $6.4bn

Shares in Reddit set to debut on NYSE under ticker 'READ'.

Reddit share sale values social media firm at $6.4bn
Reddit IPO

Reddit, the social media platform renowned for its community-driven forums, is set to go public in a highly anticipated $6.4 billion (£5 billion) initial public offering (IPO). The company's shares, priced at $34 each, will commence trading on the New York Stock Exchange (NYSE) under the ticker symbol 'READ' later on Thursday.

The IPO, which raised $748 million by selling 22 million shares, values Reddit at a substantial $6.4 billion. However, market analysts suggest that the pricing appears sensible, given the dearth of major flotations over the past three years.

Despite its immense popularity, with an average of 73.1 million daily active users, Reddit has yet to achieve annual profitability since its launch in 2005. This has raised concerns among advertisers regarding content moderation on the platform's volunteer-moderated forums, known as Subreddits.

Nevertheless, Reddit's influence is undeniable, as evidenced by the "wallstreetbets" forum's role in the 2021 'meme stock saga,' where members coordinated to buy shares of heavily shorted companies like GameStop.

While Reddit's loyal user base offers promise, its lack of consistent profitability may initially deter some investors. As trading commences, all eyes will be on READ's performance, determining whether this social media gamble will fly or fall flat.

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