Reddit IPO Targets $6.5 Billion In Valuation

Reddit, a popular social media platform, has a separate fan base in the industry and is launching a Reddit IPO. The company is often associated with losses compared to other popular social media platforms like Meta, Google, Twitter, etc.

Despite that, this Reddit IPO valuation speaks a different story because of the oversubscription. So what is happening? Let’s discuss that.

Reddit IPO Users Oversubscribed By 5X

The news agency Reuters report says that the Reddit IPO is four to five times oversubscribed, which can help Reddit achieve a valuation of $6.5 Billion. The Reddit IPO has been in demand for almost three years now, leading to oversubscription as the demand is higher than the supply. This valuation data is an assumption for now and doesn’t promise any outstanding performance for the company.

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With this much attention and user trust in the company IPO, it is anticipated that Reddit will be able to achieve the set target price of $31-$34 per share. The company has planned to offer 22 Million shares in the range of $31-$34. Earlier in 2021, Reddit valuation plans were for the $10 Billion value, which seems to differ. The company is looking to raise $748 Million to target the $6.5 Billion valuation mark.

What’s Making Reddit IPO Such In Demand?

Reddit IPO will hit the stock market this Thursday after years of waiting. The company had hosted multiple venture capital funding rounds before continuing with this IPO. It is the first social media Initial Coin Offering (IPO) after Pinterest in 2019.

Despite the losses financially, it has never impacted the platform’s popularity. Reddit has more than 72 Million active users, which has jumped by 20 Million from its 2023 count. They host 100,000 subreddits or online forums to discuss and post about different topics, which is a very different format from any other social media platform. After 20 years in the market, Reddit has built this reputation among people.

Even with the IPO, the company has thought of its loyal users firsthand as some of the special Reedit users have been rewarded with this IPO, and 8% of the stocks are reserved for them to balance the network.

With the demand in the AI sector, Reddit has also taken steps toward that. Reddit has recently collaborated with Google to train its AI models, which will turn into a good profit opportunity for Reddit.
With the Reddit IPO, the company will earn around $450 Million, adding more financial profit to the network.

Conclusion

Reddit IPO is the most trending point of discussion for all social media users as they anticipate a good run in this case. The company initially aimed for $10 Billion in valuation, but recent data reveals the valuation to be around $6.5 Billion, and that too if Reddit got to raise $748 Million in funding.

It might also create a little impact on the cryptocurrency market. This is because, during the IPO filing with the SEC in February 2024, the data showed the Bitcoin and Ethereum holding for investment purposes.

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