Reddit's IPO attracted a lot of interest, with a target valuation of $6.5 billion
Recently, a report from Reuters suggested that Reddit's IPO could give the company a valuation of $6.5 billion, with oversubscription ranging from 4 to 5 times.
This demonstrates significant public interest in Reddit's transformation into a publicly traded company
Despite achieving a $10 billion valuation in its last round raised in August 2021, the IPO price range is set at $ 31 to $ 34 per share.
The company, headquartered in San Francisco, has chosen to list on the New York Stock Exchange under the ticker RDDT. Notably, Reddit disclosed its holdings of Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC) in its IPO filing.
The IPO move comes at a less welcome time than in previous years. Still, the enthusiasm for Reddit shows strong belief in its potential among investors.
Reddit reports mixed financial results in 2023
Reddit reported net income of about $18.5 million in the final quarter of 2023. Even so, the company ended the year with a net loss of $90.8 million. The company's IPO decision aims to raise $748 million through the offering of more than 15.2 million Class A common shares. In addition, there will be 6.7 million shares offered for sale by shareholders.
In a departure from usual practice, Reddit will allow some of its employees to sell shares in the IPO. This strategy differs from the conventional approach of imposing a lock-up period that prevents early selling, which can adversely affect the stock price. Furthermore, the company is giving shares to top users with high “karma”. This innovative move acknowledges the value of the platform community.
