Astera Labs, Inc. (ALAB Proposed), an AI-driven connectivity platform, and Reddit (RDDT Proposed), an iconic social media platform, share top billing in a $1.7 billion-plus week. That total volume includes Auna S.A. (AUNA Proposed), an unprofitable Peruvian healthcare provider that aims to raise $420 million in its second attempt at going public. This week’s IPO Calendar includes about a half-dozen small-cap IPOs. All eyes are on Astera Labs and Reddit.
“We need these deals to work,” a seasoned IPO trader says.
Astera Labs, Inc. (ALAB Proposed) is an AI play. The Santa Clara, California-based company is offering 17.8 million shares at $27.00 to $30.00 to raise $507.3 million, if priced at the $28.50 mid-point. The semiconductor connectivity company, founded in 2017, counts NVIDIA and Intel among its collaborators. It’s going public with a market cap of about $4.29 billion. This is a NASDAQ listing.
Morgan Stanley, J.P. Morgan, Barclays, Deutsche Bank Securities, Evercore ISI and Jefferies are the joint book-runners.
Astera Labs has strong revenue growth – $115.8 million in 2023, up from $79.9 million in 2022 – but it’s not yet profitable. Astera Labs’ net loss in 2023 was $26.3 million – less than half of its $58.3 million net loss in 2022.
Reddit (RDDT Proposed), the social media platform whose r/Wall Street Bets forum drove the meme stock craze during the pandemic, is the first big tech IPO of the year. The 19-year-old San Francisco company, founded in a University of Virginia dorm room in 2005, has never reported a profit. Reddit is offering 22.0 million shares at a price range of $31.00 to $34.00 to raise $715.0 million. It’s going public with a market cap of about $5.17 billion, based on pricing at the $32.50 mid-point. This is a New York Stock Exchange listing.
Morgan Stanley, Goldman Sachs, J.P. Morgan, BofA Securities, Citigroup, Deutsche Bank Securities and MUFG are the joint book-runners.
Reddit co-founder and CEO Steve Huffman earned $193.25 million in 2023 – more than twice the amount of Reddit’s net loss of $90.8 million for the year.
An IPO skeptic points out that Reddit could have reported a slim profit in 2023 – simply by keeping its CEO’s pay at about $100.0 million.
Stay tuned.
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