Reddit Inc., the popular social media platform, is gearing up for one of the biggest initial public offerings (IPOs) of the year, with plans to raise up to $748 million. The company intends to sell 22 million shares for $31 to $34 each, potentially valuing Reddit at a whopping $6.5 billion.
A notable aspect of this IPO is Reddit’s decision to reserve 1.76 million shares specifically for users and moderators who created accounts before the start of this year, with no lockup period in place. This move reinforces the platform’s commitment to its community members.
Reddit’s journey to going public has been indicative of market trends, with its initial valuation at $10 billion in 2021 and expectations of reaching $15 billion the following year. Despite reporting a net loss of $91 million on revenue of $804 million in 2023, Reddit is showing promise and growth potential. One of its largest shareholders is Advance Magazine Publishers Inc., which acquired Reddit in 2006 and later spun it out in 2011.
The IPO is being led by major financial institutions including Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp. Reddit is expected to trade on the New York Stock Exchange under the symbol RDDT.
Co-founder and CEO Steven Huffman has emphasized the company’s growth opportunities, such as expanding advertising and AI licensing arrangements. Huffman owns shares that grant him 3.5% of the voting power, and other major shareholders include COO Jennifer Wong, FMR LLC, Tencent Holdings Ltd., among others.
In a strategic move, Reddit recently announced a data licensing deal with Alphabet Inc.’s Google to enhance AI technology using Reddit’s extensive data. This partnership signifies Reddit’s commitment to innovation and continuously improving user experiences on the platform.
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