Current:Home > reviewsReddit IPO to raise nearly $750 million and will offer shares to Redditors. Here's how it will work. -Zenith Investment School
Reddit IPO to raise nearly $750 million and will offer shares to Redditors. Here's how it will work.
View
Date:2025-04-19 19:27:31
Reddit said its initial public offering could raise about $748 million, and that it also plans to offer shares to the social media company's users and moderators as a way to allow them to participate in the stock sale.
In a regulatory filing on Monday, Reddit said it will sell about 15.3 million shares priced about $31 to $34 each. Additional, its investors will sell another 6.7 million shares. Together, the stock sales would be worth about $748 million, with Reddit raising about $519 million for the company through the IPO.
Based on its total number of shares outstanding, the transaction would value Reddit at $5.4 billion.
Reddit's IPO, while typical for a tech company seeking to raise more money to fuel its expansion, is unusual in that it's setting aside a significant number of shares to offer its own users. In the company's filing, CEO Steve Huffman noted that the service was built on the efforts of its community, such as moderators and users, and that Reddit wants them to be able to participate in publicly owning the business.
"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," Huffman wrote in a letter published in the filing.
He added, "We want this sense of ownership to be reflected in real ownership — for our users to be our owners. 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."
Here's what to know about Reddit's IPO
Why is Reddit going public?
Reddit said it's going public to fund its operations and potentially to expand, noting in the filing that it could use the proceeds for "strategic opportunities," although for now the platform is not planning any investments or acquisitions.
Why is Reddit offering shares to "Redditors"?
Reddit said it is reserving 1.76 million shares, or 8% of the stock it's selling in the IPO, to its Redditors, which is what it calls its users.
The shares will be sold to Redditors, according to the filing. That's unusual because companies going public typically reserve their IPO shares for big institutional investors, such as investment firms and banks. It's very unusual for a company's users to be included in a public stock sale.
Which Redditors will be offered shares in the IPO?
Only certain Redditors will be given a chance to buy stock in the IPO, according to the filing.
The company said it will invite some users and moderators to participate in the IPO in "six phased priority tiers." Users will be invited based on their "karma," which is their reputation score on the site. Moderators will be measured by their moderator actions, the filing said.
"If demand for the directed share program in an earlier tier exceeds capacity, eligible users and moderators will have the option to join a waitlist," Reddit said. "An invitation to participate in the directed share program does not guarantee that the participant will receive an allocation of shares."
Additionally, users and moderators must have created an account before January 1, 2024, and reside in the U.S. and be at least 18 years old, the filing said. Current or former Reddit employees are excluded from the offer, it added.
- In:
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (572)
prev:Trump's 'stop
Related
- McKinsey to pay $650 million after advising opioid maker on how to 'turbocharge' sales
- Amazon is reviewing whether Perplexity AI improperly scraped online content
- The 43 Most Popular Amazon Items E! Readers Bought This Month: Summer Fashion, Genius Home Hacks & More
- Minnesota family store is demolished from its perch near dam damaged by surging river
- Juan Soto praise of Mets' future a tough sight for Yankees, but World Series goal remains
- Kentucky judge keeps ban in place on slots-like ‘gray machines’
- Eagles singer Don Henley sues for return of handwritten ‘Hotel California’ lyrics, notes
- Chet Hanks Teases Steamy Hookup With RHOA's Kim Zolciak in Surreal Life: Villa of Secrets Trailer
- 'Vanderpump Rules' star DJ James Kennedy arrested on domestic violence charges
- How charges against 2 Uvalde school police officers are still leaving some families frustrated
Ranking
- Friday the 13th luck? 13 past Mega Millions jackpot wins in December. See top 10 lottery prizes
- NBA power rankings: How every team stacks up after draft
- Kenya protests resume as President William Ruto's tax hike concession fails to quell anger
- Biden speaks at NYC's Stonewall National Monument marking 55 years since riots
- Trump's 'stop
- Americans bought 5.5 million guns to start 2024: These states sold the most
- Biden speaks at NYC's Stonewall National Monument marking 55 years since riots
- Former American Ninja Warrior Winner Drew Drechsel Sentenced to 10 Years in Prison for Child Sex Crimes
Recommendation
Chuck Scarborough signs off: Hoda Kotb, Al Roker tribute legendary New York anchor
Sleeping on public property can be a crime if you're homeless, Supreme Court says
Virginia House repeals eligibility restrictions to veteran tuition benefits
Supreme Court Overturns Chevron Doctrine: What it Means for Climate Change Policy
Justice Department, Louisville reach deal after probe prompted by Breonna Taylor killing
Is ice the right way to treat a sunburn? Here's what experts say.
While Simone Biles competes across town, Paralympic star Jessica Long rolls at swimming trials
Queer – and religious: How LGBTQ+ youths are embracing their faith in 2024