Reddit's IPO Oversubscribed as it Seeks $6.5 Billion Valuation

Reddit's initial public offering is currently between four and five times oversubscribed as it seeks a $6.5 billion valuation, people familiar with the matter told Reuters on Sunday. Oversubscription doesn't guarantee that Reddit will have a strong performance in its stock market debut, although it indicates the company is likely to at least reach its targeted price range of $31 to $34 per share when it prices the IPO in New York on Wednesday, the sources said.

The social media network – which hosts forums for users to share, discuss and vote on content – has lost money each year since its 2005 launch and has struggled to match the commercial success of rivals like Meta's Facebook and X, formerly known as Twitter. Some advertisers have balked at many Reddit users' focus on niche content and the platform's approach to content moderation. The platform relies on users who volunteer to moderate the content posted on Reddit forums.

As volunteers, moderators can withdraw from the role at their discretion and several quit in protest last year over Reddit's decision to charge third-party app developers for data access. Reddit's 100,000 online forums, known as "subreddits," facilitate conversations on topics ranging from "the sublime to the ridiculous, the trivial to the existential, the comic to the serious," according to co-founder and CEO Steve Huffman.

Reddit's "wallstreetbets" forum helped drive the "meme-stock" craze of 2021 when retail investors collaborated to buy shares of highly shorted companies like video game retailer GameStop. To attract its own retail investors, Reddit has reserved 8% of the total shares on offer through the IPO for eligible users and moderators on the platform, along with certain board members and friends and family members of the company's employees and directors.

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