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Shares priced at $34 each

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Co achieves $6.4 bln target valuation

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Reserves 8% IPO shares for retail investors

By Niket Nishant

March 21 (Reuters) -

Social media platform Reddit ( RDDT ) geared up for its

high-profile market debut on the New York Stock Exchange on

Thursday, setting the stage for other companies looking to go

public this year, while testing investor appetite for new

issues.

The San Francisco, California-based company priced its

initial public offering (IPO) at the top end of the $31 to $34

range it had marketed earlier. The IPO valued Reddit ( RDDT ) at $6.4

billion and raised $748 million for the company and its selling

shareholders.

Reddit's ( RDDT ) long-awaited stint as a publicly traded company has

been in the works for more than two years. It confidentially

filed for an IPO in Dec. 2021, but the stock rout due to the

Federal Reserve's quantitative tightening prompted a delay.

The eyeball-grabbing debut will be a major test of the IPO

market, where investors are seeing some green shoots, thanks to

increasing bets of a soft landing.

"If Reddit ( RDDT ) trades poorly, it will cast a shadow over the IPO

market. Many companies will hit pause on their IPO initiatives,"

said Julian Klymochko, CEO of alternative investment solutions

firm Accelerate Financial Technologies.

RISKY RETAIL ALLOCATION

The "meme-stock" saga of 2021, when a group of retail

investors collaborated on Reddit's ( RDDT ) "wallstreetbets" to buy

shares of highly shorted companies like GameStop ( GME ), helped

drive the company's popularity to new heights.

As part of its plan to reward its user base, Reddit ( RDDT ) reserved

8% of the shares on offer for eligible users and moderators,

certain board members, and friends and family members of its

employees and directors.

But the move is fraught with risks, analysts say. Typically

shut out of bidding in an IPO, retail traders eager to gain

exposure to a newly listed company buy shares only when they

start trading, which could lead to a first-day pop.

Allowing early access to the IPO could dampen some demand.

Such buyers are also not under a lock-up period and could choose

to sell when the stock starts trading, potentially increasing

the price volatility.

"I don't know one company which really benefits from

allocating shares to their users," said Alan Vaksman, founding

partner at investment firm Launchbay Capital.

CULTURAL PHENOMENON

After its launch in 2005, Reddit ( RDDT ) became one of the

cornerstones of social media culture. Its iconic logo -

featuring an alien with an orange background - is one of the

most recognized symbols on the internet.

Its 100,000 online forums, dubbed "subreddits", allow

conversations on topics ranging from "the sublime to the

ridiculous, the trivial to the existential, the comic to the

serious," according to co-founder and CEO Steve Huffman.

Huffman himself turned to one of the subreddits for help to

quit drinking, he wrote in his letter. Former U.S. President

Barack Obama also did an "AMA" ("ask me anything"), internet

lingo for an interview, with the site's users in 2012.

The frenzy for technology stocks might help Reddit ( RDDT ) get a

good start, said Josh White, assistant professor of finance at

Vanderbilt University.

"We don't get many large tech IPOs. Those tend to be very

popular because it's hard to buy that kind of growth," White

said.

But despite its cult-like status in the social media world,

the company has failed to replicate the success of its bigger

rivals Meta Platforms' ( META ) Facebook and Elon Musk's X.

The company has said it was "in the early stages of

monetizing (its) business" and is yet to turn an annual profit.

Analysts say investors will be scrutinizing its roadmap to

profitability.

"The real news is going to be after the first earnings call

- where are they headed, what are the results looking like, what

changes are they going to make," said Reena Aggarwal, director

of the Georgetown University Psaros Center for Financial Markets

and Policy.