Reddit hopes to value its highly anticipated US IPO at up to $6.4 billion

The social networking site Reddit stated on Monday that it is looking for a valuation of up to $6.4 billion in its U.S. initial public offering (IPO), as it approaches one of the most anticipated stock market debuts of the past several years.

To generate up to $748 million, the firm and a portion of its current investors plan to sell around 22 million shares at a price of $31 to $34 a share.

The IPO will take place more than two years after the business started making plans to go public, and it will serve as a significant barometer for investors' interest in fresh listings. The IPO market's rebound has been patchy thus far this year.

The $10 billion Reddit was valued at financing in 2021 is less than the planned valuation, on a fully diluted basis.

Reddit, which debuted in 2005, quickly rose to prominence as a major figure in social media culture. Its well-known emblem, an extraterrestrial on an orange backdrop, is among the most recognisable images on the internet.

The "meme-stock" incident of 2021, in which a number of retail investors banded together on Reddit's "wallstreetbets" forum to purchase shares of heavily shorted firms, including video game retailer GameStop, is the most well-known story involving the company's prominent communities.

Reddit has set aside 8% of the total shares up for grabs for eligible users and moderators on the site, select board members, and friends and family of its directors and staff in order to reach out to the retail market.

To earn a profit on the first day of trading, these buyers, who will not be subject to a lock-up period, could decide to sell their shares, which might lead to an increase in price volatility.

The offering's primary underwriters are Morgan Stanley, Goldman Sachs, J.P. Morgan, and Bank of America Securities. The New York Stock Exchange is where Reddit plans to list under the ticker "RDDT."

(Sources: investing,com, reuters.com)