Reddit Aims For Valuation Up To $6.4B In IPO, Pricing Shares At $31 To $34

Reddit is targeting a valuation of up to $6.4 billion as it gets for its initial public offering.

The number is below the $10 billion level achieved by the company during a 2021 fundraising round, with the disparity reflecting increased expectations for tech company 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 U.S. this year in that lofty valuation range, which will make the offering a closely watched test of the market. At the midpoint of the range, on a net basis, the public listing will bring in about $451 million, the company estimated in an SEC filing.

Similar companies are worth quite a bit more than Reddit, a text-oriented, message-board-based social media firm. Facebook and Instagram parent Meta Platforms has a market value of almost $1.3 trillion, while Snap Inc. and Pinterest are each worth around $20 billion. San Francisco-based Reddit was founded in 2005.

The ownership base of Reddit after the IPO is slated to include a few familiar media and tech names. Advance Magazine Publishers, the owner of Condé Nast controlled by the Newhouse Family, is set to have a 26.5% stake in the company, while China’s Tencent will have 9.7% and OpenAI CEO Sam Altman 7.6%.

The IPO is set to happen later this month, with the company already having filed for a listing on the New York Stock Exchange under the ticker symbol RDDT.

“We hope 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 Monday’s filing.

Huffman said the goal is for “our users to be our owners” via the IPO. “Becoming a public company makes this possible. With this in mind, we are excited to invite the users and moderators who have contributed to Reddit to buy shares in our IPO, alongside our investors.”