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Reddit Aims For $6.5 Billion Valuation In Imminent IPO

Reddit, the social media giant renowned for its diverse web forums, is eyeing a valuation of nearly $6.5 billion in its imminent initial public offering.

In a corporate filing on Monday, the company disclosed plans to raise approximately $750 million, with about 22 million shares set to be sold in the range of $31 to $34 per share.

Investors are closely monitoring Reddit’s IPO, marking the first major tech debut of the year and the first social media IPO since 2019 when Pinterest went public. Of the 22 million shares, Reddit will issue about 15.3 million, aiming to raise $520 million at the top of the range, while existing stakeholders, including CEO Steve Huffman, plan to sell a combined 6.7 million shares.

Notably, Reddit has reserved approximately 1.76 million shares for its users and moderators, known as Redditors, who joined before January 1. These users can participate in the IPO without facing the customary lock-up period.

However, Reddit cautions that Redditors’ participation in the IPO could lead to increased market volatility. Notable stakeholders include Tencent, Condé Nast’s parent company, and former Reddit board member and OpenAI CEO Sam Altman.

Reddit, which filed its prospectus in February, is scheduled to go public on the New York Stock Exchange under the ticker symbol “RDDT.” In 2023, the company reported annual sales of $804 million, reflecting a 20% year-over-year increase. Despite a net loss of $90.8 million for the same period, the figure is an improvement from the $158.6 million net loss in 2022.

Reddit’s IPO, eagerly awaited by investors, underscores its significance as a major player in the social media landscape. The company’s unique approach to community engagement has garnered attention at a time when real human insight is surging in value, making its stock market debut a pivotal moment for the industry.

All eyes are on Reddit to see how it performs and whether it can sustain its unique community-driven model while delivering value to its shareholders.

To learn more about Reddit, visit its website here.

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