Reddit IncAccording to Reuters, the highly anticipated initial public offering (IPO) of . is currently oversubscribed four to five times.
This wave of investor enthusiasm suggests the social media giant is on track to reach its desired valuation of $6.5 billion.
The IPO, scheduled to price in New York on Wednesday, is targeted at $31-$34 a share, though that doesn’t guarantee a solid stock market debut.
The company adjusted its valuation targets downward from the $10 billion mark set during a private fundraising round in 2021, aiming to raise $748 million through the IPO.
Despite its strong user base, Reddit has faced annual financial losses since its inception in 2005. It has struggled to match the commercial success of competitors like Facebook and Meta Platforms’ X.
Reddit’s unique community-driven model, which relies on volunteer moderators to oversee content, has encountered challenges, particularly with advertiser relations and content moderation policies. In 2023, several moderators resigned in protest of Reddit’s decision to charge third-party app developers for access to data.
Also Read: Redditors Plot 3 Interesting Paths Reddit IPO Could Take: Pump, Dump or Scrutinized
Known for its diverse “subreddits,” Reddit has played a critical role in events like the “meme-stock” saga of 2021, in which users of the “wallstreetbets” forum spurred a buying frenzy in stocks like GameStop.
In a tribute to its community, Reddit reserved 8% of its IPO shares for its users, moderators, board members, employees, and their families and friends.
As of the end of December 2023, Reddit reported an average of 73.1 million daily active users.
Now read: From Reddit IPO Hate to Shorting Stocks: A Polarizing Debate Emerges Among Redditors
This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.
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