Reddit priced the IPO at $34 per share, valuing the company at $6.5 billion

Reddit, the 19-year-old website that hosts millions of online forums, priced its IPO on Wednesday at $34 a share, the top of an expected range.

The offering brought in $519 million, according to a press release, and values ​​the company at nearly $6.5 billion. Reddit had planned to value the deal at $31 to $34 per share.

Reddit’s public market debut on Thursday, under the ticker symbol “RDDT,” will be the first for a major social media company since on Pinterest debuted in 2019 and has been one of the few venture capital-backed tech deals in the past two years.

The company is slashing its private market valuation of $10 billion in 2021 at the height of the tech boom. Rising inflation and rising interest rates pushed investors away from venture assets in 2022, ultimately forcing startups to downsize, lower their valuations and focus on profit instead of growth.

On Wednesday, a data center hardware company Astera Laboratories went public and its stock has skyrocketed 72% as investors flock to anything involving artificial intelligence.

Reddit’s core business of online advertising faces competition from industry giants such as Alphabet and Meta.

Revenue rose 20% last year to $804 million from $666.7 million in 2022. Its 2023 net loss was $90.8 million, an improvement from the $158.6 million net loss it posted in 2022

Reddit sold 15.28 million shares in the offering, while existing shareholders sold another 6.72 million.

I’M WATCHING: What Reddit’s IPO would mean for capital markets.