Reddit, the popular social-media platform known for its diverse range of forums and communities, is gearing up for an initial public offering (IPO) that is expected to have a valuation of $6.4 billion. The company and its investors are planning to sell 22 million shares at a price range of $31 to $34 per share. If the offering is priced at the top end of the range, it would raise $748 million in proceeds, with about 15.3 million shares being sold by the company itself.
This valuation represents a significant decrease from Reddit's private valuation of $10 billion in its last funding round in August 2021. In an effort to attract retail traders, Reddit has reserved 8% of the total shares for users and moderators of its influential r/WallStreetBets forum, as well as friends and family of board members and employees. These shares will not be subject to lockup restrictions, allowing their owners to sell them on the first official trading day.
The upcoming IPO has been highly anticipated since 2021, when Reddit users played a significant role in the meme-stock mania that saw stocks like GameStop and AMC experience unprecedented volatility. With the IPO market facing uncertainty following lackluster performances from companies like Birkenstock and Instacart, Wall Street will be closely monitoring Reddit's offering as an indicator of overall market sentiment.
Overall, Reddit's IPO is poised to be a significant event in the tech and social media sectors, with the company's valuation and pricing range drawing attention from investors and analysts alike. The involvement of retail traders and the company's unique approach to share allocation add an interesting twist to an already intriguing offering.