Reddit's initial public offering (IPO) 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.
Reuters' sources said that Reddit's marketing efforts for its IPO are continuing and asked not to be identified because the details are confidential. Reddit declined to comment on the subject.
Reddit has already reduced its valuation expectations for the long-awaited IPO after it was valued in a $10 billion private fundraising round in 2021. Reddit's IPO is currently seeking to raise as much as $748 million.
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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.
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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.
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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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Reddit had an average of 73.1 million daily active "uniques" – users who use its platform at least once a day – in the last three months of 2023, according to a regulatory filing.
Reuters contributed to this report.
