Reddit Aims For $6.5 Billion Valuation In IPO Launch: Report

Reddit's upcoming IPO will include both new shares issued by the company and existing shares held by its investors and employees, as per the report

Social media platform Reddit is reportedly aiming for a valuation of up to $6.5 billion in its upcoming initial public offering (IPO). This valuation is considerably lower than its previous valuation from a few years ago. The company is reportedly planning to set a price range of $31 to $34 per share, according to a news agency Reuters report.

Reddit's upcoming IPO will include both new shares issued by the company and existing shares held by its investors and employees, as per the report quoting the sources.

At the specified price range, Reddit's value would be in the range of $6 billion to $6.5 billion on a fully diluted basis. In addition, the company intends to commence marketing the shares to prospective investors starting March 11. Reddit is considering allowing certain employees to sell their stock in the IPO, according to a Bloomberg report quoting sources.

The firm had previously announced its intention to allocate shares in the IPO for purchase by users and moderators of its platform.

The specifics of the offering, such as its scale and schedule, are subject to potential adjustments, states the report. As per filings with the US Securities and Exchange Commission, the IPO is being managed by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp.

In a funding round in 2021, Reddit was valued at $10 billion. The company had initially planned to sell approximately 10 per cent of its shares in the IPO, as per reports in January. Known for its specialised discussion communities and user-driven voting system, Reddit disclosed last month that its net loss had decreased to $90.8 million in 2023, with revenue growing by approximately 21 per cent.

Reddit's IPO filing was made public last week, marking a significant milestone nearly two decades after its launch. The IPO will serve as a crucial test for the platform, striving to achieve commercial success in the dominance of social media giants like Meta.