Reddit and its investors are seeking up to $748 million in what many believe could become one of the largest initial public offerings (IPO) so far this year.
People familiar with the matter said that the investors are looking to sell roughly 22 million shares for $31 to $34 each. The people asked to remain anonymous as the information regarding the IPO has not been made public just yet.
Reddit's High-Profile IPO
Reddit is said to be seeking a valuation of as much as $6.5 billion in the listing. The people who were familiar with the matter also said that the firm is setting aside roughly 1.76 million shares in the IPO that would be available for purchase by users and moderators who created their accounts before Jan. 1, 2024.
Those particular shares will not be subject to a lockup period, which means that the owners are allowed to sell them on the opening day of trading. A representative for the company declined to comment regarding the development.
The situation comes as Reddit's more than two-year slog to listing reflects the ups and downs of the market. It began with the company's initial confidential filing in 2021, which was when IPOs on U.S. exchanges set an all-time record of $339 billion, according to Bloomberg.
In that year, Reddit raised funds that allowed it to value itself at $10 billion and it was reported that the company could have been valued at as much as $15 billion in an IPO. On the other hand, IPOs in the U.S. tumbled and reached only $26 billion last year.
It was reported in January that Reddit was weighing feedback from early meetings with potential IPO investors that it should consider a valuation of at least $5 billion. The company became a high-profile addition to the year's roster of new and soon-to-be public companies.
The biggest of these listings was the $1.57 billion offering by Amer Sports Inc. that was made in January. Astera Labs Inc., which is a software maker that focuses on artificial intelligence, said in a filing made on Friday that it was seeking up to $534 million in its IPO, which is expected to come before Reddit's.
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Selling 22 Million Shares
IPO candidates, such as Microsoft Corp-.-backed data security start-up Rubrik Inc. and health-care payments company Waystar Technologies Inc. are expected to closely watch Reddit's listing, said Yahoo Finance.
Their deliberations come after a quartet of U.S. listings that were led by semiconductor designer Arm Holdings Plc's $5.23 billion offering in September last year was not able to ignite a lasting rebound in the market.
Reddit, a social media company that was founded in 2005, averaged 73.1 million daily active unique visitors in the fourth quarter. In 2023, the firm then reported a net loss of $91 million on revenue of $804 million.
The social media company's largest shareholder is Advance Magazine Publishers Inc., which is part of the Newhouse family publishing empire that controls Conde Nast, which is the one that bought Reddit in 2006 and later spun the company out in 2011, according to Fortune.
