Reddit's IPO of "American Tieba" Achieves Oversubscription, Getting One Step closer to Target Valuation
suisuiblue
发表于 2024-3-18 13:06:20
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According to insiders on Sunday (March 17), the initial public offering (IPO) of social media platform Reddit, also known as the "American Tieba," has received four to five times oversubscription, making the company more likely to achieve the $6.5 billion valuation it is seeking.
Sources say that although oversubscription does not guarantee strong performance on the first day of the IPO, it means that the company is expected to reach a target price range of at least $31 to $34 per share when pricing its IPO in New York on Wednesday, March 20th.
According to the prospectus, the company plans to list on the New York Stock Exchange under the stock code RDDT. It is reported that Reddit and some of its existing shareholders plan to sell 22 million shares at a price of $31 to $34 per share, and the IPO may raise up to $748 million in funds. According to this price range, Reddit's fully diluted overall valuation is approximately $6 billion to $6.5 billion.
According to documents submitted by Reddit to the US Securities and Exchange Commission, this issuance is led by Morgan Stanley, Goldman Sachs Group, JPMorgan Chase, and Bank of America.
In order to attract retail investors, the company also plans to sell 8% of its shares to specific members of the board of directors, as well as family and friends of employees, as well as moderators and users of the Reddit community.
The major shareholder behind it
At the beginning of 2021, Reddit gained a great reputation due to "retail investors short selling Wall Street," and its market valuation also skyrocketed. The company also raised funds at a valuation of $10 billion. However, compared to the currently sought to raise up to $748 million, the valuation has significantly shrunk.
According to a regulatory document, during the three months ending December 31, 2023, Reddit had an average of 73.1 million active users per day, meaning users who used the platform at least once a day.
Although many users are loyal, since its launch in 2005, Reddit has been losing money every year and lags behind its peers such as Facebook and X (formerly known as Twitter) under the Meta platform in terms of business.
It is worth mentioning that many large enterprises are interested in Reddit. It is reported that Tencent holds 6.4% of Reddit's A-class shares and 11.7% of its B-class shares, with a total shareholding of 11% and 11.6% of the voting rights, making it the second largest shareholder of the company.
OpenAI CEO Sam Altman is also one of Reddit's major shareholders. According to the prospectus, Ultraman holds 4.5% of Reddit's Class A shares and 9.3% of its Class B shares, with a shareholding ratio of 8.7% and 9.2% of the voting rights, making it the third largest shareholder of the company.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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