Reddit Aims for $6.4bn Valuation Ahead of Initial Public Offering
upstart writes:
Reddit aims for $6.4bn valuation ahead of initial public offering:
Reddit, one of the most popular websites in the world, is hoping for a valuation of up to $6.4bn (5bn) 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 in the US revealed that Reddit and its investors are 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."
Reddit, which was founded almost 20 years ago, is an online forum where users can post questions and comment on topics that interest them.
[...] However, some users are worried that the IPO would change the site for the worse.
"When the most important customers shift from [users] to shareholders, the product always [suffers]," said one person.
"It becomes 'what can we do this quarter to squeak out an additional point of revenue', instead of 'how can we make this product better'."
[Hmmm, a site built on user-submitted topics and user-submitted comments that has never made a profit might be worth $6B . . . maybe after the new site is set up we should IPO while the iron is still hot! --hubie]
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