Reddit, the popular social media platform, is gearing up for its initial public offering (IPO) with around 22 million shares priced between $31 to $34. However, the IPO could be a wild ride as Reddit plans to allow its community members to sell their shares immediately after the offering.
Contrary to previous reports, Reddit is only selling 15 million shares, aiming to raise up to $519 million instead of the initially rumored $748 million. By involving its community in the IPO process, Reddit opens itself up to the possibility of becoming a meme stock akin to GameStop.
In a bold move, Reddit has listed its own subreddit, r/WallStreetBets, as a risk factor in the IPO prospectus, citing potential market manipulation by Redditors. Additionally, participants in Reddit’s directed share program, including eligible Reddit users, moderators, board members, friends, and family, will be able to sell their shares at any time without being subject to lock-up agreements.
Despite having a large user base, Reddit has struggled to turn a profit. In an effort to boost revenue, the company has announced a new strategy involving data licensing. When Reddit debuts on the New York Stock Exchange (NYSE), it will trade under the ticker symbol “RDDT.”
As the IPO date approaches, investors and Redditors alike will be closely watching to see how Reddit’s unique approach to going public will impact its valuation and market performance. Keep an eye on Heartland Magazine for updates on Reddit’s IPO journey.
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