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Reddit Estimated at $5B Valuation in the Social Media IPO Market
January 29, 2024
Reddit is preparing to go public, eying a significant valuation of at least $5 billion. With plans to make the move this spring, this development has generated buzz within the investment community.
Reddit, a social media network that brings users together in forums to discuss, share, and rate content, is presently meeting with potential investors. The aim of these meetings is to hammer out the fundamentals of the company’s upcoming initial public offering (IPO). Some industry insiders suggest that the company should aim for a valuation around the ballpark of $5 billion.
Reddit’s shares, currently unlisted, have been traded privately at a valuation below the targeted $5 billion. Platforms like Rainmaker Securities and Forge Global Holdings have seen bids with values ranging from $4.5 billion to $4.8 billion. However, it’s worth noting that private trades often carry a lower valuation than an IPO. This is down to the fact that unlisted shares are mostly illiquid, meaning they trade at a discount compared to their publicly traded counterparts.
Reddit’s IPO plan has been in the works for around three years, with a prospective public filing scheduled for late February. This move will be followed by a roadshow where Reddit will target potential investors before officially launching the IPO by the end of March. As per the current plan, around 10% of the shares will be up for grabs during the IPO.
Reddit’s journey has seen the company’s value fluctuate. Following a funding round in December 2021, Reddit was valued at about $10 billion. However, due to the volatile IPO market, Reddit has had to delay its plans and push back its IPO.
The upcoming few months could prove to be vital for Reddit. Its official valuation will be decided closer to the listing date. The platform’s IPO will also serve as a significant test for the IPO market’s recovery.
However, it’s important to note that these plans may still be subject to change. Reddit has delayed its IPO plans before, and it could potentially happen again.
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