March 12, 2024 (MLN): Reddit Inc. disclosed further details of what is set to be one of the year’s biggest initial public offerings, with the company and some existing shareholders seeking to raise as much as $748 million, as Bloomberg reported.
Reddit and the holders are planning to sell 22m shares for $31 to $34 each, the social media platform said in a filing Monday.
About 15.3m those shares will be sold by the company and the rest by the investors, who are Reddit employees.
At the top of that range, Reddit, whose users helped create the meme stock frenzy of 2021, would have a market value of $5.4 billion, based on almost 159m shares outstanding.
Fully diluted to include employee stock options and restricted share units, the company’s valuation would be about $6.4bn, the filing with the US Securities and Exchange Commission shows.
About 8% of the IPO shares are being set aside for Reddit users and moderators who created accounts before January 01, as well as some board members and friends and family of some employees and directors.
Those shares won’t be subject to a lockup, meaning the owners can sell them on the opening day of trading, according to Reddit’s filing that confirms an earlier report by Bloomberg News.
The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filings. Reddit plans for its shares to trade on the New York Stock Exchange under the symbol RDDT.
The company intends to price the IPO on March 20 and begin trading the following day, according to people familiar with the matter who asked not to be identified because the information wasn’t public.
A representative for Reddit didn’t immediately respond to a request for comment on the timing.
Reddit’s Valuation
Reddit’s more than two-year slog to listing reflects the ups and downs of the market, beginning with its initial confidential filing in 2021, when IPOs on US exchanges set an an all-time record of $339bn, according to data compiled by Bloomberg.
Reddit raised funds that year valuing it at $10bn, and Bloomberg News reported the following year that it could be valued at as much as $15bn in an IPO.
Meanwhile, IPOs in the US tumbled, reaching only $26bn last year, the data show.
In January, Bloomberg News reported that Reddit was weighing feedback from early meetings with potential IPO investors that it should consider a valuation of at least $5bn.
The company is a high-profile addition to the year’s roster of newly and soon-to-be public companies.
The biggest of those listings was the $1.57bn offering by Amer Sports Inc. in January. Astera Labs Inc., a software maker focused on artificial intelligence, said in a filing Friday that it would seek up to $534m in its IPO, which will likely proceed Reddit’s.
Reddit’s listing will be watched closely by IPO candidates such as Microsoft Corp.-backed data security start up Rubrik Inc. and health-care payments company Waystar Technologies Inc.
Their deliberations come after a quartet of US listings led by semiconductor designer Arm Holdings Plc’s $5.23bn offering in September failed to ignite a lasting rebound in the market.
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Posted on: 2024-03-12T09:06:16+05:00
