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Reddit is targeting a huge valuation of $6.4 billion and is looking to secure a minimum of $500 million. During its initial public offering, Reddit intends to provide 15.3 million shares priced between $31 and $34 each. Big-name banks, such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America, are supervising the entire procedure. Additionally, Reddit is giving its long-term users the opportunity to invest before others.
Reddit is preparing for a substantial initial public offering (IPO), intending to generate more than $500 million. This could potentially estimate the value of the social media behemoth at a remarkable $6.4 billion. This strategic decision could have broad implications for other private startups that are contemplating going public in 2024.
The business is scheduled to kick off its promotional tour on Monday, aiming to attract investors to join in a listing on the New York Stock Exchange. This step is expected to revitalize the IPO market after a slow spell of two years.
Reddit aims to make available 15.3 million shares priced between $31 and $34 each. Renowned financial bodies such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America will supervise the procedure.
The projected value of Reddit, when fully diluted, is anticipated to be between $5.8 billion and $6.4 billion. This is significantly lower than the $10 billion value it achieved during its most recent private funding round in 2021. If the proposed listing goes ahead as scheduled, Reddit might be able to generate up to $519 million.
Moreover, current stockholders will offload an additional 6.7 million shares, while almost 2 million shares are set aside for acquisition by users and moderators who became a part of the platform prior to the first day of January.
The choice to become a publicly traded company is happening in a slow US initial public offering (IPO) environment, where even new listings struggle to draw in investors. Reddit's IPO is expected to act as a benchmark, measuring the interest levels of both large-scale and individual investors in a market known for its extreme reactions to price changes.
Even though Reddit earned a substantial amount from advertising, accounting for a large portion of its $800 million sales in the previous year, it has not managed to make a yearly profit. In 2023, it reported a deficit of $91 million.
Furthermore, there are worries that the initial public offering might draw in speculative trading activities, similar to the retail trading craze observed with stocks such as AMC and GameStop.
Reddit was established in 2005 and bought by Condé Nast in 2006. In 2011, Advance Publications decided to make it an independent subsidiary. Now, with its forthcoming Initial Public Offering (IPO), Reddit is set to make a substantial impact on the public trading platforms.
(Incorporating information from various sources)
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