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Reddit is targeting a huge valuation of $6.4 billion, with plans to raise a minimum of $500 million. During its initial public offering, Reddit intends to make available 15.3 million shares priced between $31 and $34 each. Major financial firms like Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America are supervising the process. Reddit is also giving its long-term users the opportunity to invest first.
Reddit is preparing for a substantial initial public offering (IPO), with a target to gather more than $500 million, which could potentially increase its value to an impressive $6.4 billion. This step could have wide-ranging effects on other private startups thinking of going public in 2024.
The firm is slated to kick off its promotional tour on Monday, aiming to attract potential investors for a listing on the New York Stock Exchange. This move is expected to rejuvenate the IPO market, which has been slow for the past two years.
Reddit intends to provide 15.3 million shares priced between $31 and $34 per share. Renowned financial establishments such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America will be supervising the procedure.
Reddit's estimated value is predicted to fall between $5.8 billion and $6.4 billion when fully diluted, marking a significant drop from its previous valuation of $10 billion during its latest private funding round in 2021. Should the listing go ahead as scheduled, Reddit might be able to generate up to $519 million.
Moreover, current shareholders are set to sell an extra 6.7 million shares, and close to 2 million shares have been set aside for acquisition by users and moderators who became members of the platform prior to January 1.
The choice to become a public company arises during a slow period for US IPOs, as even new listings struggle to draw in investors. Reddit's IPO is expected to act as a benchmark, measuring the interest of both corporate and individual investors in a market marked by intense concern over price fluctuations.
Even though Reddit made a substantial amount of money through advertising, contributing greatly to its $800 million sales in the previous year, it still hasn't been able to make a yearly profit. In 2023, it reported a loss of $91 million.
Furthermore, there are worries that the IPO might draw in speculative trading activity, similar to the retail trading chaos experienced with stocks such as AMC and GameStop.
Established in 2005 and bought by Condé Nast in the following year, Reddit became an independent offshoot under Advance Publications in 2011. As it approaches its initial public offering, Reddit is set to significantly impact the public trading sphere.
(Incorporating information from various sources)
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