Reddit expects a valuation of as much as $6.5 billion in its initial public offering, according to people familiar with the matter.
The social media company plans to target a price range of $31 to $34 a share in the first stock sale, the people said, asking not to be identified because the information is private.
At that price range, Reddit would have a fully diluted value of about $6 billion to $6.5 billion, the people said. The company plans to market the shares to potential investors on March 11, they added.
According to sources, Reddit also plans to allow some employees to sell shares during the IPO. The company had already announced that it will set aside shares during the IPO to be purchased by users and moderators of its platform.
Details of the offering, including size and timing, could change, the people added. The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to documents filed with the U.S. Securities and Exchange Commission.
Representatives of those banks declined to comment. Some details, including the price range and valuation, were previously reported by the Wall Street Journal.
San Francisco-based Reddit is a high-profile member of this year’s club of new and soon-to-be public companies, following a two-year slump of IPOs on U.S. stock exchanges.
The largest of these listings was Amer Sports Inc.’s $1.57 billion offering in January. Current IPO candidates include Microsoft Corp.-backed data security startup Rubrik Inc. and healthcare payments company Waystar Technologies Inc.
Reddit was evaluating feedback from early meetings with potential IPO investors that it should consider a valuation of at least $5 billion, Bloomberg News reported in January. The company was targeting a valuation in the single-digit billions, people familiar with the matter said at the time.
The valuations under consideration would represent a significant retreat from those seen during the heyday of the tech pandemic. Reddit raised funds in 2021 valuing it at $10 billion, and Bloomberg News reported the following year that the company could potentially be valued at up to $15 billion in an IPO.
The company plans to have its shares traded on the New York Stock Exchange under the symbol RDDT.