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Reddit targets $6.5 billion valuation for IPO debut!


Reddit targets $6.5 billion valuation for IPO debut

Reddit Inc., a well-known social media platform, is reportedly considering a significant valuation of up to $6.5 billion in its upcoming initial public offering (IPO) as reported by Bloomberg.


This ambitious valuation is based on information provided by sources who have requested anonymity due to the private nature of the discussions. This potential valuation highlights the company's robust financial aspirations as it prepares to enter the public market.


The company is exploring a share price range of $31 to $34 for its initial stock offering. If this price range is implemented, Reddit’s valuation, accounting for all shares and financial instruments, is estimated to be between $6 billion and $6.5 billion.


The company has scheduled the beginning of its marketing campaign to potential investors for March 11. This phase is critical for establishing investor interest and setting the stage for a successful public debut.



In an interesting and somewhat unique move, Reddit is planning to enable certain employees to sell their stock as part of the IPO process. This strategy is in line with the company's previous announcement that it intends to reserve a portion of its IPO shares specifically for its users and moderators. This decision reflects Reddit's community-centric approach and acknowledges the significant role that these groups play in the platform's ecosystem.


The specifics of the IPO, such as the total number of shares to be offered and the precise timing of the offering, are still subject to change. The IPO process is being spearheaded by a consortium of notable financial institutions, including Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp. These banks have adhered to conventional practices by refraining from commenting on the IPO details. Prior to this, The Wall Street Journal had reported on some aspects of the proposed pricing range and overall valuation.


Headquartered in San Francisco, Reddit is set to join a select group of companies that are newly listed or planning to go public this year. This is a significant development following a two-year period that saw a downturn in the number of IPOs on U.S. exchanges.



Notable among the recent IPOs is Amer Sports Inc.'s offering, which raised $1.57 billion in January. Other companies poised for IPOs include Rubrik Inc., backed by Microsoft Corp., and Waystar Technologies Inc., which specializes in healthcare payments.


Earlier in the year, following preliminary discussions with potential IPO investors, Bloomberg News reported that Reddit was contemplating a minimum valuation of $5 billion. The company was reportedly targeting a valuation in the mid-single-digit billion range, according to individuals familiar with the matter at the time.



The valuations currently under consideration mark a significant shift from the higher valuations seen in the technology sector during the height of the pandemic. To put this in perspective, Reddit achieved a $10 billion valuation through fundraising in 2021. In the subsequent year, Bloomberg News reported that the company might have reached a valuation of as much as $15 billion if it had gone public at that time.


Looking ahead, Reddit plans to list its shares on the New York Stock Exchange under the ticker symbol RDDT. This listing represents a pivotal moment in the company's history and is indicative of the changing dynamics within the technology industry and the broader IPO market. Reddit's decision to go public reflects its growth and the increasing relevance of social media platforms in the global digital landscape.


02.03.2024



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