Reddit, the popular social media platform, is reportedly aiming for a valuation of up to $6.5 billion in its upcoming initial public offering (IPO), according to sources familiar with the matter. The company plans to target a price range of $31 to $34 per share in its first-time share sale, with a fully diluted value ranging from about $6 billion to $6.5 billion. Reddit is expected to begin marketing the shares to potential investors on March 11, marking a significant move for the San Francisco-based company.
In a strategic move, Reddit is also planning to allow some employees to sell stock in the IPO. The company had previously disclosed its intention to reserve shares in the IPO for purchase by users and moderators of its platform, demonstrating a unique approach to involving its community in the offering.
While details of the offering, including size and timing, could potentially change, the IPO is being led by major financial institutions, including Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp., as per filings with the US Securities and Exchange Commission. Representatives for these banks declined to comment on the matter.
Reddit’s IPO comes amid a resurgence in public offerings, following a two-year slump in IPOs on US exchanges. The company is part of a notable cohort of newly and soon-to-be public entities in 2024, signaling a renewed interest in the market.
The current valuation target for Reddit reflects a shift from its earlier considerations. In January, reports suggested that the company was exploring a valuation of at least $5 billion, with a mid-single-digit-billion valuation as the target. This marks a significant retreat from the valuations seen during the tech industry’s pandemic-era peak, as Reddit raised funds in 2021 valuing the platform at $10 billion, with speculation that it could have potentially reached a $15 billion valuation in an IPO.
If all goes as planned, Reddit intends for its shares to trade on the New York Stock Exchange under the symbol RDDT, adding another high-profile name to the list of publicly traded tech companies. The market will be closely watching Reddit’s IPO as it unfolds, considering both its financial performance and the unique dynamics of involving users and employees in the offering.
