The Reddit IPO (initial public offering) is currently between four and five times oversubscribed, as per people familiar with the matter on Sunday. This will make the social media platform Reddit attain the $6.5 billion valuation it seeks. Reddit Inc. and its investors are seeking to raise as much as $748 million in what would be one of the biggest IPO so far this year, according to people familiar with the matter.
Reddit IPO price
The social media platform and some of its current shareholders plan a sale of 22 million Reddit stock for a targeted price between $31 to $34 each. The company was seeking a valuation of as much as $6.5 billion in the listing, Bloomberg News has reported. The Reddit IPO price shall be declared on the day of trading.
Reddit IPO date
Investors will be able to buy Reddit stock starting March 21. The Reddit stock will likely cost between $31 and $34.
Should you buy into Reddit IPO?
Though Reddit IPO is oversubscribed, it does not guarantee a strong performance in the stock market debut. While the oversubscribed Reddit IPO indicates investor interest, Reddit’s history of losses and its struggle to monetize its platform effectively are factors to consider. The Reddit oversubscribed Reddit IPO simply means Reddit is poised to at least reach its targeted price range of $31 to $34 per share when it prices the IPO in New York on Wednesday, the sources said.
The sources said the marketing of the IPO was continuing and asked not to be identified because the details are confidential. There were no comments from a Reddit spokesperson.
In the IPO paperwork, CEO Steve Huffman cited the role Reddit can play in peoples’ lives.
“Whatever people are into or going through, it is on Reddit. I am particularly proud of the role Reddit plays in providing support to people during pivotal life moments when turning to friends and family may not be an option. Somebody might visit r/Parenting for help when they’re having trouble with a child, or go to r/lgbt for advice about coming out, or they might turn to r/stopdrinking for help quitting drinking, as I did more than four years ago,” said Huffman.
Reddit valuation
Reddit has already curbed its valuation expectations after it was valued in a $10 billion private fundraising round in 2021. The Reddit’s IPO is currently seeking to raise valuation of as much as $748 million.
Reddit’s reserve shares
The people said the company is setting aside about 1.76 million shares in the IPO to be bought by users and moderators who created accounts before January 1. Those shares won’t be subject to a lockup period, meaning the owners can sell them on the opening day of trading, according to Reddit’s filing in February with the U.S. Securities and Exchange Commission.
How to buy Reddit stock?
If you’re a Reddit super user, you could potentially be one of 75,000 people who will be given the opportunity to purchase Reddit stock at the IPO price. If not you’ll have to wait a little longer.
Once Reddit has gone public on March 21, you’ll be able to buy Reddit stock. I
Reddit behind competition
Despite the loyalty of many of its users, Reddit has lost money every year since its launch in 2005 and has lagged the commercial success of contemporaries such as Meta Platforms’ Facebook and Twitter, now known as X.
The focus of many Reddit users on niche subjects and the platform’s somewhat loose approach to content moderation has been a sticking point with some advertisers. Reddit relies on volunteers from its user base to moderate the content posted on its forums.
Moderators can decide to withdraw from their duty at any time, as in 2023, when several quit in protest over Reddit’s decision to charge third-party app developers for access to its data.
Reddit’s community
Reddit’s 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 and chief executive Steve Huffman.
The company’s influential communities are best known for the “meme-stock” saga of 2021 when several retail investors collaborated on Reddit’s “wallstreetbets” forum to buy shares of highly shorted companies such as video game retailer GameStop.
To tap retail investors, Reddit has reserved 8% of the total shares on offer for eligible users and moderators on its platform, certain board members and friends and family members of its employees and directors.
Reddit IPO ticker
Reddit IPO will trade on the NYSE under the ticker “RDDT.”
