Reddit's IPO Sparks Huge Interest, Targeting $6.5 Billion Valuation, Says Report

Zinger Key Points
  • Reddit's IPO is four to five times oversubscribed, signaling strong investor interest.
  • Despite past losses, Reddit seeks to raise up to $748 million in eagerly awaited IPO.

Reddit Inc.'s eagerly anticipated initial public offering (IPO) is currently oversubscribed by four to five times, according to Reuters. 

This surge of investor enthusiasm suggests the social media giant is on track to achieve its desired $6.5 billion valuation.

The IPO, scheduled for pricing in New York on Wednesday, is targeted at $31 to $34 per share, though this does not guarantee a robust stock market debut.

The company adjusted its valuation goals downward from the $10 billion mark set during a private fundraising round in 2021, aiming to raise $748 million through the IPO.

Despite its solid userbase, Reddit has faced annual financial losses since its inception in 2005. It has struggled to match the commercial success of peers like Meta Platforms' Facebook and X.

Reddit's unique community-driven model, relying on volunteer moderators for content oversight, has seen challenges, particularly with advertiser relations and content moderation policies. In 2023, several moderators resigned in protest against Reddit's decision to charge third-party app developers for data access.

Also Read: Redditors Lay Down 3 Interesting Routes Reddit IPO Might Take — Pump, Dump Or Scrutinized

Known for its diverse "subreddits," Reddit has played a pivotal role in events like the 2021 "meme-stock" saga, where users on the "wallstreetbets" forum spurred a buying frenzy in stocks like GameStop.

In a nod to its community, Reddit has reserved 8% of its IPO shares for its users, moderators, board members, employees, and their families and friends.

As of the end of December 2023, Reddit reported an average of 73.1 million daily active users.

Now Read: From Hating Reddit IPO To Shorting The Stock: A Polarizing Debate Emerges Among Redditors

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock

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