Reddit, Inc. RDDT has filed an amendment to a filing with the U.S. Securities and Exchange Commission (SEC) on March 11.
The filing discloses the company’s plan to offer more than 15.2 million shares of its Class A common stock, accompanied by an additional 6.7 million shares offered by selling stockholders.
The proposed initial public offering (IPO) price per share ranges between $31 and $34, aiming to raise a substantial $748 million with a targeted launch valuation of $6.4 billion.
Read Also: Is Reddit’s Business Model A ‘Ticking Time Bomb’?
Reddit Users Weigh In
Is the reddit IPO priced favorably?
One Reddit user, Backieotamy, took to the r/stocks community to seek opinions on whether Reddit’s IPO is priced favorably. The post prompted a diverse range of responses from the community, reflecting various perspectives on the upcoming IPO.
Community Responses:
Other responses:
- GuitarHero52: “I don’t think I would buy it at all. The company is trying to go public at a $6.4 billion valuation. They have a negative shareholder’s equity of approximately $413 million and a net income loss of about $91 million.”
- audigex: “And what's the plan for profitability? More ads? Subscriptions? I don't see the revenue stream that will be enough to become profitable without just driving away users.”
- mcaffrey: “Impossible to say whether or not it will be a good investment in the short term… Personally, I’m buying in for 500-1000 shares because I believe in Reddit long-term.”
Related: From Hating Reddit IPO To Shorting The Stock: A Polarizing Debate Emerges Among Redditors
Scrutinizing the Financial Landscape
Some community members, like GuitarHero52, delved into the financial details, highlighting concerns about negative shareholder’s equity and net income loss. Additionally, discussions surfaced regarding convertible preferred stock, its ownership by key individuals, and the perceived advantages over common stock, raising questions about the fairness of the deal.
The Road to Profitability
User audigex questioned Reddit’s plan for profitability, expressing uncertainty about the potential revenue streams and their ability to balance profitability without alienating users.
Diverse Opinions on Valuation
The community displayed a spectrum of opinions on Reddit’s valuation, with bighand1 defending the $3 billion valuation, while others, like evilwon12, expressed skepticism about the company’s future performance.
The Long-Term Believers
In contrast, mcaffrey voiced confidence in Reddit’s long-term potential, emphasizing the platform’s impressive engagement metrics and anticipating improved monetization strategies over time.
As Reddit’s IPO approaches, the community remains divided on whether to upvote or downvote the company’s financial prospects. The diverse perspectives paint a nuanced picture of investor sentiment, highlighting the uncertainties and debates surrounding Reddit’s journey into the public market.
Investors, both optimistic and cautious, eagerly await the unfolding of Reddit’s financial narrative.
Read Next: Reddit’s IPO Buzz: What Investors Must Be Aware (Or Wary) Of
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