Reddit and its bankers are guiding that they could price the social media platform's initial public offering (IPO) at the top of the indicated range or above, according to a source familiar with the matter. The San Francisco, California-based company is seeking a valuation of $6.5 billion in the IPO and had indicated it would sell shares at a price between $31 and $34 each. If priced at the top end of that range, the IPO would fetch $748 million for Reddit and its selling shareholders.

Get your shorts ready, this will be very interesting to follow. Seems like the stock will appear tomorrow already?

I fully expect a nosedive in stock price but who knows. Maybe a pump and dump.

  • catloaf@lemm.eeEnglish
    0·
    8 months ago

    The source: reddit and its bankers. Like I’m going to believe that.

    Also, the valuation works out to only $750m? That seems low considering how much they’ve been hyping it.

    Edit: the valuation is $6.5b but the IPO would fetch $750m. Not sure how that math works.

    • empireOfLove2@lemmy.dbzer0.comEnglish
      0·
      8 months ago

      $6.5b but the IPO would fetch $750m.

      Pretty normal. They sell off a set % of the company’s shared during an Initial Public Offering and set the share base price at their calculated expected valuation. Companies never sell off 100% of their shares. Reddit owns these shares and sets the sell price accordingly. Raising 750m would be selling about 11.5% stake if they think they’re worth $6,500mil.

      The market is not obligated to buy shares at Reddit’s stated price. Once they’re on the market shares can go up or down depending on how realistic the market thinks Reddit’s stated valuation is. If they think the valuation is crap they’ll not buy until the share price drops to their expected valuation.

    • stoly@lemmy.worldEnglish
      0·
      8 months ago

      They are essentially selling that percentage of the company to the public at large. Not enough for any shareholder to have any power over it, but enough for the company to get some spending money.