In an unexpected turn of events, social media giant Reddit is setting its sights on a whopping $6.5 billion valuation in its initial public offering (IPO). This information comes from individuals familiar with the matter, who have asked to remain anonymous due to the privacy of the information.
Unveiling Reddit’s IPO Details
According to these insiders, Reddit plans on targeting a share price range of $31 to $34 in its maiden share sale. This would see Reddit boasting a fully diluted value of approximately $6 billion to $6.5 billion. The company also plans to start marketing the shares to potential investors from March 11.
Furthermore, Reddit has plans to allow some of its employees to sell stock in the IPO. This move comes after the company’s previous disclosure that it would set aside shares in the IPO to be bought by users and moderators of its platform.
Conditions Subject To Change
However, it’s important to note that the specifics of the offering, including the size and timing, could change as per the insiders’ information. The IPO is currently being led by financial powerhouses Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filings with the US Securities and Exchange Commission.
Based in San Francisco, Reddit is a standout member of this year’s cohort of newly and soon-to-be public companies, following a two-year slump in IPOs on US exchanges.
Reddit’s Valuation Journey
In January, Bloomberg News reported that Reddit was considering a valuation of at least $5 billion, after weighing feedback from early meetings with potential IPO investors. This proposed valuation would mark a significant step back from the lofty valuations seen in the tech industry’s pandemic-era heyday.
In 2021, Reddit managed to raise funds valuing it at $10 billion. Bloomberg News later reported that the company could potentially have been valued as high as $15 billion in an IPO.
The company intends for its shares to be traded on the New York Stock Exchange under the symbol RDDT.
Current IPO Landscape
The biggest of the listings so far this year was the $1.57 billion offering by Amer Sports Inc. in January. Other current IPO candidates include Microsoft Corp.-backed data security start up Rubrik Inc. and health-care payments company Waystar Technologies Inc.
Despite previous highs and lows in the IPO market, Reddit’s move is anticipated to cause a stir in the tech industry. As the company gears up for its big day, stakeholders, investors and the tech community will be keenly watching the next steps of this social media powerhouse.
In conclusion, Reddit’s audacious valuation target for its IPO is a clear signal of the company’s confidence in its growth prospects and its strategic positioning in the social media landscape. As we anticipate this significant milestone, it’s worth noting that Reddit’s journey thus far is a testament to the transformative power of tech innovation.
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