Social media platform Reddit’s much-waited-for initial public offering is being oversubscribed between four and five times. The social media platform might be worth $6.5 billion, as per a report by Reuters.
This indicates that the company will be attaining a target price of $31 to $34 per share once it's listed on the New York stock exchange. However, overvaluation does not mean strong stock market performance, as per the Reuters report.
Reddit, along with its shareholders, plan to sell shares for $31 to $34 each. Overall, they plan to sell 15.3 million shares. The platform is aiming to raise $748 million, as per a filing on the United States Stock Exchange (Securities and Exchange Commission).
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Since its launch in 2005, Reddit has lost money. Despite having a strong loyal base, the platform didn’t achieve commercial success, unlike its contemporary platforms such as X (formerly known as Twitter) and Facebook.
The platform recorded an average of 73.1 million daily active "unique" users during the three months ending on December 31, 2023, as per a regulatory filing. A unique user is defined as someone who uses its platform at least once a day.
Similarly, on Friday, the US Federal Trade Commission was looking into the licensing, sale, and sharing of “user-generated content to third-party users." The content was being shared to train AI models.
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According to Reuters, Reddit said, “Given the novel nature of these technologies and commercial arrangements, we are not surprised that the FTC has expressed interest in this area. We do not believe that we have engaged in any unfair or deceptive trade practice.” Reuters had earlier reported that Reddit had decided to make its content available for Google to train its AI model.
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