Reddit Aims To Raise $750 Million in The Upcoming IPO and Reach A Valuation of $6.4 Billion

• Reddit officially submitted the corporate filing on Monday for its upcoming IPO
• The company aims to raise at least $750 million and reach a total valuation of $6.4 billion
• Out of 22 million stocks, 1.76 million will be available for Reddit moderators to buy

Reddit is all set for one of the most-awaited IPOs of the year. As per a statement made by the company on Monday, it is expecting to reach a valuation of at least $6.4 billion with this IPO round. And as for the IPO itself, it is aiming to raise at least $750 million.

The IPO was first filed in February under the careful guidance of Goldman Sachs, J.P. Morgan Bank of America Securities, and Morgan Stanley.

The corporate filing which was filed on Monday said that Reddit is planning to sell 22 million shares, each ranging between $31 to $34. As per reports, the company is going to be listed on the New York Stock Exchange under RDDT."

The official filing comes 2 years after the company started preparing to go public. While many investors are looking forward to the event, it's hard to say whether it's the right time for an IPO. This is because the IPO market this year hasn't been great, and market recovery has been quite uneven.

Read More: Reddit includes Bitcoin, Ethereum, And Polygon to its Balance Sheet ahead of its IPO

Reddit's IPO Is One Of A Kind: Here's Why

Investors and market experts are all eagerly waiting for Reddit IPO. This will be the first social media platform to go public since Pinterest's IPO in 2019.

What makes this IPO even more interesting is that Reddit has announced that out of the 22 million shares, 1.76 million will be made available to Reddit moderators and loyal users who have been on the platform for a long time.

This is the company's way to express its gratitude and uphold the vision it believes in i.e. Reddit is a community for the people by the people.

It's unusual for any social media company to offer an IPO to regular users as that can increase volatility. Unlike corporate investors, these users won't be required to be in a lock-in period (the period during which they won't be allowed to sell their stocks) which can make the entire process risky for the others.

However, Reddit has promised to distribute the stocks through a guided program and is confident in its decision.

Speaking about the same, the director of the Georgetown University Psaros Center for Financial Markets and Policy, Reena Aggarwal said This is a unique IPO and what happens with it is going to be partly driven by the buzz on the platform."

Challenges For Reddit

Reddit is undoubtedly a unique social media platform. However, despite being a popular name, it has failed to draw the same attention that many of its contemporaries like Instagram and Snapchat do.

Reddit has never played by the rules, as we can see from the way it went about its IPO. So, naturally, it'll be under a lot more scrutiny than others.

Also, Reddit has a very unconventional content moderation policy. Instead of having an internal team, it depends on its users to volunteer. Of course, they are under no legal obligation to carry out their duties so they can quit anytime - like they did back in 2023 when they protested against Reddit charging third-party developers for accessing the platform.

Additionally, in the last 3 years, only Meta has managed to perform well in the stock market whereas Pinterest and Snapchat have suffered. Now, all eyes will be on Reddit this year to see if it can break the pattern.

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