Reddit wants to raise $748 million in IPO – Kommersant
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Reddit Inc. plans to raise about $748 million as part of the initial public offering of shares, reports Bloomberg with reference to own sources. The company and its investors will sell approximately 22 million shares at an estimated starting price of $31–34 each. Thus, the company values itself at $6.5 billion.
In addition, 1.76 million shares will be allocated for purchase as part of the IPO by users and moderators of the popular forum who had accounts before January 1, 2024.
Reddit first announced its intention to hold an IPO back in 2020. At the end of 2021, the company filed a confidential application with the US Securities and Exchange Commission (SEC) about its readiness to conduct an IPO, after which for a long time nothing was reported about the placement of the company’s shares. Finally in January Reuters reported about Reddit’s plans to hold an IPO in March of this year. A public statement of intent to conduct an initial public offering was filed with the SEC in late February.
However, Reddit’s valuation has dropped significantly in recent years. In 2021, the company was valued at $10 billion, and as part of the discussion of plans for an IPO, it initially expected a valuation of $15 billion. However, the IPO market in the United States has cooled significantly over the years: in 2021, the total volume of initial public offerings on American exchanges reached record levels $339 billion, then last year it amounted to only $26 billion. And already at the beginning of this year, Reddit management, in private negotiations with investors, hoped that the company’s valuation would be at least $5 billion, Bloomberg notes.
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