Reddit eyes $6.4 billion valuation in US IPO

Reddit IPO: Social network Reddit is targeting a $6.4 billion valuation in its initial public offering (IPO) in the United States, as it prepares for one of the most expected stock market launch in recent times.

Existing investors of the company and the social media firm itself is looking to sell 22 million shares for raising $748 million, at a range between $31 and $34 each.

The stockholders selling the shares are offering 6.7 million of the company’s shares ahead of the public offering.

Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America Securities are the lead agents for Reddit’s IPO. The company is looking to list as “RDDT” on the New York Stock Exchange. 

The valuation is lower than its target of $10 billion, when Reddit had raised funds in 2021.

The public offering comes two years after Reddit started preparing for it, and in times when market recovery for IPO has been uneven.

 Reddit was launched in 2005, and soon became a linchpin for social media culture. It features an alien with an orange background, and has 1 lakh online forums or subreddits where people can speak on topics ranging from "the sublime to the ridiculous, the trivial to the existential, the comic to the serious," co-founder Steve Huffman said.

Former US President Barack Obama in 2012 turned to the platform for an ‘Ask Me Anything’ (AMA) session with users, while its founder Huffman turned to a subreddit for helping him get off his drinking habit.

In 2021, Reddit was part of a  "meme-stock" saga wherein a set of retail investors from its influential communities came together on a forum called "wallstreetbets" for the purchase of shares from highly shorted companies, in the likes of video game retailer GameStop. 

The company is also putting a Reddit Pro feature on trial, which will comprise of AI-powered insights, and elevated performance analytics.

(With Reuters Inputs)