Turn back the clocks, social media is back!
Social networking site Reddit, which bills itself as a community of communities and one of the Internet’s largest sources of information, has successfully priced its initial public offering (IPO), raising $748 million in proceeds — $520 million of which will go to Reddit and balance ($228 million) to the selling shareholders.
The offering priced 22 million shares at $34 a share — the top of the advertised $31 to $34 range, which bodes well for the health of the overall IPO market and demand for Reddit stock in particular. Reddit stock will soon begin trading on the New York Stock Exchange under the ticker symbol RDDT.
Reddit was valued at $6.5 billion in the offering. The valuation is actually down from Reddit’s last round of private market funding held in 2021, to around $10 billion.
Reddit’s IPO is the first public market debut of a major social media player in nearly five years, since Pinterest went public in April 2019 at $19 a share — for reference, shares of Pinterest (NYSE :PINS) have done well overall (despite some ups and downs) are now at around $34.75.
While there aren’t too many direct links to the FX and CFD business in Reddit’s IPO – other than Reddit being a very popular place for retail traders to share news and views about the industry and the brokers that service it – there is certainly a lesson to be learned for FX and CFD brokers serving retail and eyeing an IPO themselves.
At the top of this list is eToro, which is one of the most social trading focused online brokers. eToro CEO Yoni Assia was recently discussing his company’s plans to go public after a failed IPO attempt in 2021-22 when eToro attempted a SPAC merger. Other retail FX and CFD brokers that may consider an IPO if the market turns favorable include Saxo Bank and ThinkMarkets, which have tried (but failed) to go public recently, also through SPAC mergers.