Reddit is targeting a valuation of $6.4 billion in its initial public offering.
This number is lower than the $10 billion level the company achieved during its 2021 fundraising round, and the disparity reflects rising expectations for the technology company’s profitability. The IPO would raise $748 million at the top of the price range, and only a small handful of companies have gone public in the United States this year at that lofty valuation range, making the offering a closely watched test of the market. At the middle of the range, on a net basis, a public listing would bring in about $451 million, the company estimated in a Securities and Exchange Commission filing.
Similar companies are worth slightly more than Reddit, a text-based social media and message board company. Meta Platforms, the parent company of Facebook and Instagram, has a market cap of about $1.3 trillion, while Snap Inc. And Pinterest is about $20 billion. Reddit was founded in San Francisco in 2005.
Reddit’s post-IPO ownership base is set to include a few familiar media and tech names. Advance Magazine Publishers, owner of Condé Nast, which is controlled by the Newhouse family, will own a 26.5% stake in the company, while Chinese company Tencent will hold 9.7% and OpenAI CEO Sam Altman will hold 7.6%.
The IPO is scheduled to take place later this month, with the company already applying to list on the New York Stock Exchange under the ticker symbol RDDT.
“We hope that going public will provide meaningful benefits to our community as well. “Our users have a deep sense of ownership over the communities they create on Reddit,” CEO Steve Huffman wrote in a letter included in a filing on Monday.
The goal is for “our users to become our owners” through the IPO, Hoffman said. “Becoming a public company makes this possible. With this in mind, we are excited to invite users and moderators who have contributed to Reddit to purchase shares in our IPO, along with our investors.