24.1 C
Los Angeles
Wednesday, June 19, 2024

Breaking News Since 2024


Top 5 This Week

Related Posts

Reddit Targets $6.4 Billion Valuation In Anticipation Of IPO Debut

Reddit, a leading website globally, aims for a valuation of up to $6.4 billion (£5 billion) as it prepares to go public next week.

The social media giant, despite never turning a profit, is set to list its shares on the New York Stock Exchange. According to a filing in the US, Reddit and its investors intend to offer 22 million shares priced between $31 and $34 each.

However, there are concerns among users that this move might alter the essence of the platform.

A portion of the shares will be earmarked for Reddit users and moderators, a move intended to foster a sense of ownership among the community.

The company plans an initial public offering (IPO), marking the first time some of its shares will be available for public purchase.

“Our users deeply identify with the communities they establish on Reddit,” wrote co-founder Steve Huffman in a letter to potential investors released weeks ago. “We aim for this sense of belonging to translate into actual ownership – for our users to become our owners. Going public enables this vision.”

Established nearly two decades ago, Reddit functions as an online forum where users engage in discussions and share thoughts on various subjects.

While the platform generates revenue primarily through advertising, it recently inked a deal with Google, granting the tech behemoth access to Reddit data to enhance its artificial intelligence (AI) models.

Reddit has incurred losses every year since its inception, including over $90 million in the past year alone.

Furthermore, the projected valuation falls short of the $10 billion mark from a private fundraising round in 2021.

Key stakeholders currently include media conglomerate Advance Magazine Publishers, Chinese tech titan Tencent, US investment firm Fidelity, and Sam Altman, CEO of OpenAI, the parent company of ChatGPT.

A platform powered by users, Reddit, established in 2005, distinguishes itself from other social media platforms like Facebook or TikTok.

Users typically feel more liberty in expressing themselves, albeit within the guidelines enforced by moderators within specific subreddit communities.

The influence of Reddit communities became evident during episodes like the Gamestop saga in 2021, where users rallied to inflate the share price of the US video game retailer.

Initially valued at $20, the shares skyrocketed to a peak of $350 due to coordinated efforts from Redditors.

Nevertheless, some users fear that the IPO might have adverse effects on the platform.

“When the focus shifts from users to shareholders, the quality of the product often suffers,” expressed one individual. “It becomes more about short-term revenue gains rather than enhancing the product.”

Popular Articles