Reddit targets up to $6.4 billion valuation in much-awaited US IPO

By Thomson Reuters Mar 11, 2024 | 5:16 AM

(Reuters) – Reddit is aiming for a valuation of up to $6.4 billion in its U.S. initial public offering (IPO), the social media platform said on Monday, as it nears one of the most-anticipated stock market debuts of the last few years.

The company, along with some of its existing investors, is targeting a sale of about 22 million shares, priced between $31 and $34 each, to raise up to $748 million. Nearly 6.7 million of the shares are being offered by the selling stockholders.

The IPO, a major litmus test for investors’ appetite for new listings, will come more than two years after the company began preparations to go public. So far this year, the IPO market recovery has been uneven.

The targeted valuation, on a fully diluted basis, is less than the $10 billion Reddit was valued at after a fundraising in 2021.

After its launch in 2005, Reddit became one of the cornerstones of social media culture. Its iconic logo – featuring an alien with an orange background – is one of the most recognized symbols on the internet.

Its 100,000 online forums – dubbed “subreddits” – allow conversations on topics ranging from “the sublime to the ridiculous, the trivial to the existential, the comic to the serious,” according to co-founder Steve Huffman.

Huffman himself turned to one of the subreddits for help to quit drinking, he wrote in his letter. Former U.S. President Barack Obama also did an “AMA” (“ask me anything”), internet lingo for an interview, with the site’s users in 2012.

The company’s influential communities are best known for the “meme-stock” saga of 2021, when a bunch of retail investors collaborated on Reddit’s “wallstreetbets” forum to buy shares of highly shorted companies like video game retailer GameStop.

Morgan Stanley, Goldman Sachs, J.P.Morgan and Bank of America Securities are the lead underwriters for the offering. Reddit expects to list on the New York Stock Exchange under “RDDT.”

(Reporting by Niket Nishant and Manya Saini in Bengaluru and Echo Wang in New York; Editing by Arun Koyyur and Anil D’Silva)