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Reddit is striving to achieve an enormous valuation of $6.4 billion and seeks to gather a minimum of $500 million
For its initial public offering (IPO), Reddit intends to make available 15.3 million shares, each priced between $31 to $34. Major financial organizations such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America will supervise the procedure. Additionally, Reddit is providing its long-standing users with the opportunity to invest first.
Reddit is preparing for a substantial initial public offering (IPO), hoping to generate more than $500 million. This could potentially value the social media powerhouse at an impressive $6.4 billion. This step could have widespread effects on other privately-owned startups contemplating a public launch in 2024.
The firm is scheduled to kick off its promotional tour on Monday, aiming to attract investors for their listing on the New York Stock Exchange. This action is anticipated to rejuvenate the IPO market after a slow phase that lasted two years.
Reddit intends to make available 15.3 million stocks priced between $31 and $34 apiece. Notable banking entities such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America are supervising the procedure.
Reddit's valuation is projected to drop significantly from its previous $10 billion figure during the last private funding round in 2021, with estimates now placing it between $5.8 billion and $6.4 billion on a fully diluted basis. Depending on how the listing goes, Reddit could potentially generate up to $519 million.
Moreover, current stockholders will offload an additional 6.7 million shares, with close to 2 million shares set aside for acquisition by members and moderators who became part of the platform prior to January 1.
The choice to become a publicly-traded company is happening in a slow US Initial Public Offering (IPO) environment where even new IPOs are struggling to draw in investors. Reddit's IPO is expected to act as a benchmark, measuring the interest of both professional and individual investors in a market marked by a high degree of price sensitivity.
Even though Reddit earned a considerable amount from advertising, contributing a large part to its $800 million sales in the previous year, it hasn't managed to make a yearly profit yet. In 2023, it reported a loss of $91 million.
Moreover, worries exist that the IPO might invite speculative trading activities, similar to the retail trading madness witnessed with stocks such as AMC and GameStop.
Established in 2005 and bought by Condé Nast in 2006, Reddit was later made an autonomous subsidiary by Advance Publications in 2011. With its imminent initial public offering (IPO), Reddit is set to have a substantial impact on the public financial markets.
(Incorporating information from various sources)
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