Current:Home > MyReddit IPO to raise nearly $750 million and will offer shares to Redditors. Here's how it will work. -VitalEdge Finance Pro
Reddit IPO to raise nearly $750 million and will offer shares to Redditors. Here's how it will work.
View
Date:2025-04-26 09:35:25
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! (922)
Related
- Chuck Scarborough signs off: Hoda Kotb, Al Roker tribute legendary New York anchor
- Americans say they're spending less, delaying big purchases until after election
- The adult industry is booming. Here's what you need to know about porn and addiction.
- Chris Martin falls through stage at Coldplay tour concert in Australia: See video
- The Best Stocking Stuffers Under $25
- Is fluoride in drinking water safe? What to know after RFK Jr.'s claims
- James Van Der Beek reveals colon cancer diagnosis: 'I'm feeling good'
- Freddie Prinze Jr. Reveals How He and Sarah Michelle Gellar Avoid BS Hollywood Life
- How effective is the Hyundai, Kia anti-theft software? New study offers insights.
- Rob Gronkowski’s Girlfriend Camille Kostek Reacts to Gisele Bündchen’s Pregnancy News
Ranking
- Where will Elmo go? HBO moves away from 'Sesame Street'
- Kourtney Kardashian and Travis Barker's Baby Rocky Gets Priceless Birthday Gift From Sylvester Stallone
- Mariah Carey Posing With Her Christmas-Themed Wax Figure Will Make Your Wish Come True
- Family pleaded to have assault rifle seized before deadly school shooting. Officers had few options
- Paula Abdul settles lawsuit with former 'So You Think You Can Dance' co
- From UConn three-peat to Duke star Cooper Flagg, the top men's basketball storylines to watch
- How to Build Your H&M Fall Capsule Wardrobe: Affordable Essentials to Upgrade Your Style
- Stevie Wonder urges Americans: 'Division and hatred have nothing to do with God’s purpose'
Recommendation
Working Well: When holidays present rude customers, taking breaks and the high road preserve peace
Ohio sheriff’s lieutenant apologizes for ‘won’t help Democrats’ post, blames sleep medication
Bowl projections: Alabama, Indiana BYU join playoff as CFP gets makeover with Week 10 upsets
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Secret Crush
Video shows dog chewing cellphone battery pack, igniting fire in Oklahoma home
Spurs coach Gregg Popovich sidelined indefinitely with undisclosed illness
Horoscopes Today, November 4, 2024
Santa's delivery helpers: Here are how the major shippers are hiring for the holidays