Home Markets Reddit to raise nearly $750 million in upcoming IPO

Reddit to raise nearly $750 million in upcoming IPO

by SuperiorInvest

In this photo illustration the Reddit logo is seen on a cell phone and computer monitor on February 13, 2024 in Los Angeles, California.

Mario Tama | fake images

Reddit aims to raise up to $748 million as part of its upcoming IPO, with the social media company seeking a valuation of around $6.5 billion.

The company plans to sell about 22 million shares at between $31 and $34 per share, according to a corporate filing released Monday.

Reddit has also reserved approximately 1.76 million shares for certain users and moderators, known as Redditors, who want to participate in the IPO and have created their user accounts before January 1. These Redditors will be able to buy those shares and then sell them. when Reddit goes public, as they will not be subject to a lockup period, which typically prevents investors from selling shares for six months after the IPO.

The company warned in its S-1 filing that Redditors participating in its IPO “could result in increased volatility in the market price” of the company's Class A common stock. Other companies that have gone public and allowed certain community members and others to participate in their IPOs through similar directed equity programs include Doximity, Rivian and Airbnb.

Reddit filed its initial public offering prospectus in February and said it planned to go public on the New York Stock Exchange and trade under the symbol “RDDT.”

Investors are closely watching Reddit's upcoming IPO, which will be the first major tech stock launch this year and the first social media IPO since Pinterest went public in 2019.

In 2021, Reddit filed a confidential draft of its public offering prospectus with the Securities and Exchange Commission. During that same year, Reddit raised $1.3 billion in a funding round and had a private market valuation of $10 billion, according to deal tracking service PitchBook.

Reddit's annual sales in 2023 were $804 million, which represented a 20% year-over-year increase from $666.7 million, according to the company's S-1 filing. It also posted a net loss of $90.8 million for 2023, down from the $158.6 million net loss it posted in 2022.

Some of the company's notable shareholders include Tencent, Condé Nast's parent company Advance Magazine Publishers, and OpenAI CEO Sam Altman, who was a member of Reddit's board of directors from 2015 to 2022.

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