Reddit is targeting a substantial valuation of $6.4 billion and aims to generate 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. Renowned financial institutions such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America are supervising the process. Additionally, Reddit is providing its long-standing users with the initial opportunity to invest.
Reddit is preparing for a substantial initial public offering (IPO), targeting to generate more than $500 million. This could potentially value the social media behemoth at a remarkable $6.4 billion. This step could influence 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 a listing on the New York Stock Exchange. This action is expected to revitalise the IPO market after a slow-paced two-year stretch.
Reddit intends to make available 15.3 million stocks within a price bracket of $31 to $34 each. Renowned financial organizations such as Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America are set to supervise the process.
Reddit's valuation is anticipated to fall between $5.8 billion and $6.4 billion on a fully diluted basis, marking a significant drop from its $10 billion valuation during the 2021 private funding round. If the planned listing goes ahead, Reddit may be able to generate up to $519 million.
Moreover, current shareholders are planning to sell an additional 6.7 million shares. Almost 2 million shares have been set aside for acquisition by users and moderators who became part of the platform prior to January 1.
The choice to become a public company occurs in a slow US IPO market, where even new listings struggle to draw in investors. Reddit's IPO is expected to act as a benchmark, assessing the interest of both professional and individual investors in a market known for its intense price sensitivity.
Even though Reddit made a significant portion of its $800 million sales in the previous year through advertising revenue, it hasn't managed to generate a yearly profit yet. In fact, it reported a $91 million loss in 2023.
Furthermore, there are worries that the Initial Public Offering might draw in speculative trading activities, similar to the retail trading madness associated with stocks such as AMC and GameStop.
Established in 2005 and bought by Condé Nast in the following year, Reddit was later made an independent subsidiary by Advance Publications in 2011. As Reddit is preparing for its initial public offering (IPO), it is set to make a substantial impact on the public markets.
(Incorporating information from various sources)
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