Online social platform, Redditwould be encouraged by potential investors to aim for a valuation above $5 billion in its upcoming initial public offering (IPO).
According to a Bloomberg report on Sunday, Reddit could go public as early as March. The success of the IPO, however, will depend on the state of the IPO market, which has experienced difficulties in recent years.
While Reddit’s current private market valuation is estimated to be less than $5 billion, in late 2021, when the company began preparing for its IPO, there were hopes that it could reach $15 billion.
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Investors remain hopeful that 2024 will mark a more active year for the IPO market, buoyed by profitable tech startups like Instagram AND Klaviyo listed on the stock exchange last year. Further optimism is fueled by the possibility of rate cuts by the Federal Reserve and a weakening of the M&A market.
Reddit’s projected valuation signals a shift away from the era of sky-high valuations of social media companies. The latest social media company to go public was Pinterest in 2019, with a valuation of $10 billion.
Launched in 2005, Reddit, often called “the front page of the Internet,” was sold to Condé Nast for just $10 million in 2006. The company has seen significant growth, particularly during the pandemic, when the stock meme- mania.
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This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.
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