Report states that company’s valuation reaches $6.5 billion.
Reddit is on track to achieve a valuation of $6.5 billion with its upcoming initial public offering (IPO), as reported by Reuters. The IPO, based in San Francisco, is currently oversubscribed between four and five times, according to anonymous sources. This valuation is a decrease from the $10 billion achieved in the company’s last fundraising round in August 2021. The planned IPO price range is set at $31 to $34 per share. Reddit, which holds Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC) according to its IPO filing, plans to trade under the ticker RDDT on the New York Stock Exchange.
Despite its success, Reddit has yet to turn a profit. In the last quarter of 2023, the company reported a net income of approximately $18.5 million. However, it ended the year with a net loss of $90.8 million. Through the IPO, Reddit aims to raise $748 million by offering more than 15.2 million shares of its Class A common stock, along with an additional 6.7 million shares offered by selling stockholders. Interestingly, Reddit will allow some employees to sell shares during the IPO, which differs from the usual practice of imposing a lock-up period. Additionally, the company plans to reserve shares for top users with high “karma,” which is a measure of reputation on the platform.
Reddit was acquired by media company Condé Nast in 2006. Co-founder and CEO Steve Huffman currently owns 3.3% of the company, while fellow co-founder Alexis Ohanian left in 2020. Other major shareholders of Reddit include Condé Nast’s parent company, Advance Publications (30.1%), Shenzhen-based Tencent (11%), and OpenAI CEO Sam Altman (8.7%).
The decision to target a lower valuation in the IPO is influenced by the current state of the IPO market, which has been slow. So far in 2024, there have been 33 IPOs on the U.S. stock market, a 10% increase compared to the same period in 2023. However, globally, there were only 1,429 IPOs in 2023, the lowest number since 2019 and a drop of nearly 16% from 2022.
In other news, Reddit recently shut down its blockchain-based Community Points service. Follow us on Google News for more updates.
