The IPO of Reddit exceeded the subscription by 5 times, the estimate is $6.5 billion
According to Reuters, Reddit looks set to reach a valuation of $6.5 billion in an initial public offering (IPO).
The number of subscribers to the IPO of the San Francisco-based social media company is currently four to five times higher, the report said, citing unnamed sources.
This figure is less than the $10 billion estimate reached during the last fundraising round in August 2021.
The planned IPO price range is set between $31 and $34 per share.
Reddit, which, according to its IPO application, owns Bitcoin (BTC), Ethereum (ETH) and Polygon (MATIC), plans to trade under the ticker RDDT on the New York Stock Exchange.
Reddit has not yet made a profit.
For the last quarter of 2023, the company announced a net profit of about $18.5 million. The company ended 2023 with a net loss of $90.8 million.
Reddit, which is seeking to raise $748 million through an IPO, plans to offer more than 15.2 million of its Class A common shares, as well as an additional 6.7 million shares offered by selling shareholders.
Reddit will also provide some of its employees with the opportunity to sell shares during the IPO, which is different from the typical process of introducing a lock-up period to prevent an immediate sale that could negatively affect the share price.
It will also reserve promotions for the best users who have good "karma" — a term that the platform uses to evaluate the reputation of its users on the site.
Reddit was sold to Condé Nast media company in 2006.
Co-founder and CEO Steve Huffman owns 3.3% of the company (his co-founder colleague Alexis Ohanian left the company in 2020).
Other major shareholders of Reddit include Condé Nast's parent company, Advance Publications (30.1%), as well as Shenzhen, Chinese company Tencent (11%) and OpenAI CEO, Sam Altman (8.7%).
