Reddit targets $6.4 billion valuation ahead of initial public offer
By Story Agencies, March 12, 2024Reddit, one of the most popular websites in the world, is hoping for a valuation of up to $6.4 billion when its shares go public next week. The social media company, which has never made a profit, will float shares on the New York Stock Exchange.
A filing with the US Securities and Exchange Commission (SEC) revealed that Reddit is hoping to sell 22 million shares for between $31 and $34 each. However, many users worry the move will fundamentally change the website. Some shares will be specially reserved for some Reddit users and moderators.
The company is planning an initial public offering (IPO) which would make some of its shares publicly available to buy for the first time. “Our users have a deep sense of ownership over the communities they create on Reddit,” wrote co-founder Steve Huffman in a letter to prospective investors released a few weeks ago. “We want this sense of ownership to be reflected in real ownership – for our users to be our owners. Becoming a public company makes this possible.”
Online forum
Reddit, which was founded almost 20 years ago, is an online forum where users can post questions and comment on topics that interest them. The company makes most of its money through advertising on the platform, although it recently struck a deal with Google which allows the tech giant to access Reddit data to train its artificial intelligence (AI) models. Reddit has recorded losses every year since its start, including more than $90m last year. The valuation is also far less than the $10bn at which it was valued in a private fundraising round in 2021.