Online social platform, Reddit, is reportedly being encouraged by potential investors to aim for a valuation exceeding $5 billion in its impending initial public offering (IPO).
As per a report from Bloomberg on Sunday, Reddit could go public as soon as March. The success of the IPO, however, will hinge on the state of the IPO market, which has experienced difficulties in recent years.
While Reddit's current private market valuation is estimated to be below the $5 billion mark, there were hopes in late 2021, when the company first began preparing for its IPO, that it could reach as high as $15 billion.
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Investors remain hopeful that 2024 will signal a more active year for the IPO market, buoyed by profitable tech startups such as Instacart and Klaviyo going public last year. Further optimism is driven by the possibility of rate cuts by the Federal Reserve and a weakening M&A market.
Reddit's intended valuation indicates a departure from the era of sky-high social media company valuations. The last social media company to go public was Pinterest in 2019, with a valuation of $10 billion.
Launched in 2005, Reddit, often referred to as "the front page of the internet", was sold to Condé Nast for a mere $10 million in 2006. The company has experienced significant growth, particularly during the pandemic, when it birthed the meme-stock craze.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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