Reddit is targeting a significant valuation of $6.4 billion and hopes to raise a minimum of $500 million. In its initial public offering, Reddit intends to make 15.3 million shares available priced between $31 and $34 each. Renowned banking institutions such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America are supervising the procedure. Furthermore, Reddit is providing its long-term users with an opportunity to invest first.
Reddit is preparing for a substantial initial public offering (IPO) with the goal to generate more than $500 million, potentially establishing the social media behemoth's value at a remarkable $6.4 billion. This decision could have extensive effects on other private startups contemplating an IPO in 2024.
The firm is scheduled to kick off its promotional tour on Monday, aiming to attract investors to join a listing on the New York Stock Exchange. This step is anticipated to revive the Initial Public Offering (IPO) market after a slow-paced spell of two years.
Reddit intends to make 15.3 million shares available at a cost between $31 and $34 each. Major financial firms like Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America will supervise the procedure.
Reddit's estimated worth, when completely diluted, is projected to fall between $5.8 billion and $6.4 billion. This is a significant drop from the $10 billion worth it was given during the previous private funding round in 2021. Assuming the listing goes as scheduled, Reddit stands the chance to generate up to $519 million.
Moreover, current stockholders will dispose of an additional 6.7 million shares, with close to 2 million shares set aside for acquisition by members and overseers who have been part of the platform prior to January 1.
The choice to become a publicly traded company emerges during a slow period for US initial public offerings (IPOs), with even new listings struggling to draw in investors. Reddit's IPO is expected to act as a benchmark, measuring the interest levels of both traditional and individual investors in a market marked by intense price fluctuation.
Even though Reddit made a significant amount from advertising, which considerably added to its $800 million revenue last year, it hasn't managed to earn a yearly profit yet. In 2023, it reported a loss of $91 million.
Furthermore, there are worries that the initial public offering (IPO) might invite speculative trading activities, similar to the retail trading madness that occurred with stocks such as AMC and GameStop.
Reddit, established in 2005, was bought by Condé Nast in 2006. However, in 2011, it was made into a separate subsidiary by Advance Publications. Currently, Reddit is on the verge of going public, a move that could considerably impact the stock markets.
(Incorporating information from various sources)
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