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Reddit is targeting a whopping $6.4 billion valuation and is seeking to secure a minimum of $500 million
During its IPO, Reddit intends to provide 15.3 million shares priced between $31 and $34 each, with major banks such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America managing the process. Reddit is also giving its long-standing users the opportunity to invest initially.
Reddit is preparing for a substantial initial public offering (IPO) with plans to generate more than $500 million, possibly placing the social media behemoth's value at a noteworthy $6.4 billion. This action might have extensive consequences for other private startups contemplating going public in 2024.
The firm is scheduled to kick off its promotional tour on Monday. The aim is to attract investors to take part in a listing on the New York Stock Exchange. This step is anticipated to revitalize the Initial Public Offering (IPO) market after experiencing a slow phase for a couple of years.
Reddit intends to make available 15.3 million shares, priced between $31 and $34 each. Major banking corporations such as Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America will supervise the procedure.
Reddit's value is projected to fall between $5.8 billion and $6.4 billion when fully diluted, marking a significant drop from its previous $10 billion valuation during the 2021 private funding round. If all goes according to plan with the listing, Reddit could raise up to $519 million.
Moreover, current stockholders are set to offload an additional 6.7 million shares. 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 publicly traded company emerges during a slow period in the 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 levels of both corporate and individual investors in a market known for its dramatic price volatility.
Even though Reddit's substantial ad revenue played a big role in its $800 million sales in the previous year, the company has not managed to make a yearly profit yet. In fact, it reported a loss of $91 million in 2023.
Moreover, there are worries that the Initial Public Offering (IPO) might invite speculative trading activities, similar to the retail trading mania related to stocks such as AMC and GameStop.
Established in 2005 and later bought by Condé Nast in 2006, Reddit became an autonomous subsidiary when Advance Publications divested it in 2011. As it prepares for its initial public offering, Reddit is set to make a substantial impact on the public trading platforms.
(Incorporating information from various sources)
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