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Is Reddit's potential $5 billion IPO valuation a cautious step back or a strategic leap forward in today's unpredictable market? Reddit, Inc. Inc. is currently weighing its IPO options, with early investor meetings suggesting a valuation target of at least $5 billion. This figure is notably below the company's private market valuation, which peaked at $10 billion in 2021. In a market that's witnessed tech giants recalibrate and downsize valuations, Reddit's choice seems reflective of a broader trend. The company's 2021 valuation at $10 billion, with prospects reaching as high as $15 billion, now contrasts sharply with current private trades valuing it between $4.5 and $4.8 billion. However, it's crucial to consider the context. The market for IPOs is still thawing from its freeze, and the valuation is yet to solidify. Remember Instacart? Once valued at $39 billion, its public debut was at a significantly lower $9.9 billion. Reddit, a central figure in the meme-stock frenzy of 2021, represents not just a company but a symbol of the volatile, crowd-driven market dynamics of recent years. What does this mean for potential investors and the market at large? Reddit's cautious valuation could be a harbinger of a more grounded approach in tech IPOs. The company's history and influence, especially its role in the meme-stock era, add a unique twist to its market perception. The final IPO valuation and timing are still in flux, and it will be interesting to see how Reddit navigates the current market environment, balancing its iconic status with investor expectations. What's your take on Reddit's IPO strategy? Is this a smart move in a market still reeling from overvaluations, or is it too cautious, underselling the company's true potential? #RedditIPO #TechValuation #MarketDynamics Mergers and Acquisitions - themiddlemarket.com

According to CEO Brett Schulman, CAVA started preparing for its IPO two years ahead of time, even holding mock earnings calls. This is just one example of how growing interest in private market investing is reshaping the investor relations lifecycle. Here's how we see it: ? Retail investors are reshaping pre-IPO investing: Companies like DealMaker, Fundrise, Republic, Sweater, and EquityZen are innovating to make it easier to access the private markets. ? Private companies are adapting IR strategies. For example, fast-growing Zilch, rumored to IPO soon, has already begun sharing financial updates out to the public. (https://lnkd.in/ehqfE3xg) ? Pre-IPO engagement builds loyalty: Reddit, Inc., Robinhood, Airbnb, and SoFi all offered early access to loyal users before their IPOs, building committed investor bases. ? Early IR prep pays off: On recent episodes of After Earnings (from Morning Brew ??), Cava's Schulman and monday.com CFO Eliran Glazer shared the importance of building IR muscle and infrastructure early. Why it matters: As retail investors gain access to private markets, companies need to build robust IR strategies earlier, creating a foundation for long-term success. ?? Keep reading: https://lnkd.in/eaQ-QdBN

IR Magazine recently featured an article by Gateway's Senior Managing Director, Cody Slach! ??The article titled "How Reddit, Inc.'s IPO and direct share program will impact the market's momentum" explains Reddit's unique entrance into the capital markets and offers a look ahead at what this could mean for other companies looking to go public. ??"If interest rates can come down and the earnings story for these new market participants is positive, it will raise investors’ risk appetite, opening the door for a wave of smaller IPOs to hit the market." Read Cody's full article linked below to learn more. #IPO #Reddit #stocks #stockmarketnews #investors

VCs will get liquidity in 2024 from the secondary market, not IPOs In 2023, many VCs thought 2024 would see the IPO market bounce back, according to TechCrunch. Yet, with Q1 almost done, there's hardly a major IPO in sight except Reddit. Speculation about potential IPOs, like Shein and Turo, continues with little action. Despite hopes, a Reddit IPO might not kickstart a wider trend, with big names like Databricks, Stripe, and Plaid steering clear of going public this year. High interest rates and low valuations from the 2021 highs make IPOs less appealing. But it's not all bad news. The secondary market, where private shares are sold, is booming as an alternative to IPOs. It's grown massively, with transactions reaching $138 billion in 2023. This market allows companies to offer liquidity without the pressure of going public, showcased by Stripe's $65 billion secondary sale. Even venture funds are getting in on the action, buying or selling shares to manage their portfolios. While the IPO freeze might continue, the secondary market thrives, offering a workaround for companies and investors alike. Source — Tech Crunch

Last week, Reddit IPOed. And the result for investors was great. And bad. How’s that possible? We hear you ask. Well, Reddit’s share price almost doubled within a week. That makes new investors happy! However, the company’s valuation at the IPO was $3.6 billion (36%!) lower than at their last round in 2021. No need to tell you how old investors feel about that, right? ?? Welcome to a new phenomenon: the down-round IPO. Once an investor's dread, it's now becoming a common occurrence. Is this the much-needed return to “sanity” after years of bloated valuations? And why should this matter to us as designers? ?? : https://lnkd.in/d8ysTES2 #dmba #onlinelearning #designcommunity #businessdesign #ipo #reddit #designthinking

Any IPO is a major moment in time for a brand. But for Reddit, Inc., the upcoming IPO means so much more, to so many more. Predictions often say that what happens on 21 March is a litmus test. Not just for the value of challenger, loss-making, advertising-based social media companies, or even for their viability with investors. Instead, it’s a test for the IPO market itself. If done successfully — and if they are able to convince institutional investors there is tangible value in their model — this could be a turning point in a lackluster IPO landscape. But it comes with great risk, and not just for the stock price. The very future of the platform is potentially in question. Read what more Rich W. has to say about Reddit’s IPO via our blog post. https://lnkd.in/ewixk6rr

The Tech IPO drought continues... Despite early optimism in 2024 after Reddit’s successful IPO, this year has been another bust and we're facing the longest IPO drought in over a century. M&A activity has not been great either --- So, this puts a worrisome strain on investors (and founders) in regards to liquidity. If you raised your first round of capital 10 years ago, it would have been realistic to think if you grew your company to $100M in revenue you could take your company public and "cash out". For those companies that successfully did this, the goalposts have moved. According to a recent article by Vieje Piauwasdy at Secfi, the market would now suggest that later-stage companies need to hit $200-300M in revenue before considering an IPO. Additionally, the market is expecting companies to be maintaining 30%+ growth AND be profitable (or at least showing a clear path to profitability). This is a tough ask requiring both aggressive growth AND profitability prior to going public. Typically the would-be profits are reinvested in the company to help facilitate the aggressive growth objectives. Seems the market wants its cake and wants to eat it too. Another challenge is the current macroeconomic factors. With the election looming and interest rates comparatively high --- I think the consensus is the IPO window will remain closed for the remainder of 2024. At this point, it seems like we are already looking to 2025. What do you think --- Are we writing off 2024? Is there optimism for more IPOs in 2025? How are later-stage companies and their investors looking at liquidity for 2025? Share your thoughts in the comments below.

VCs will get liquidity in 2024 from the secondary market, not IPOs In 2023, many VCs thought 2024 would see the IPO market bounce back, according to TechCrunch. Yet, with Q1 almost done, there's hardly a major IPO in sight except Reddit. Speculation about potential IPOs, like Shein and Turo, continues with little action. Despite hopes, a Reddit IPO might not kickstart a wider trend, with big names like Databricks, Stripe, and Plaid steering clear of going public this year. High interest rates and low valuations from the 2021 highs make IPOs less appealing. But it's not all bad news. The secondary market, where private shares are sold, is booming as an alternative to IPOs. It's grown massively, with transactions reaching $138 billion in 2023. This market allows companies to offer liquidity without the pressure of going public, showcased by Stripe's $65 billion secondary sale. Even venture funds are getting in on the action, buying or selling shares to manage their portfolios. While the IPO freeze might continue, the secondary market thrives, offering a workaround for companies and investors alike. Source — Tech Crunch

Reddit's pre-IPO valuation could reach $5 bln The company plans to hold an IPO in March this year, Bloomberg reported The valuation of online platform Reddit could reach $5 bln before its initial public offering (IPO), Bloomberg reported citing sources. According to the report, "Reddit Inc. is weighing feedback from early meetings with potential investors in its initial public offering that it should consider a valuation of at least $5 bln, according to people familiar with the matter, even as it is estimated below that figure in the volatile market for shares of private companies." The company plans to hold an IPO in March this year, Bloomberg reported. Reddit was launched in 2005, and in 2006 it was acquired by the publishing house Conde Nast for $10 mln, according to Axios. Over 50 mln people visit the website every day, The New York Times writes. #business #finance #financialservices

As Going Public gears up for Season 2, the broader market continues to pick up momentum! The world was watching Reddit’s stock debut to gauge whether the IPO market might pick up after a lengthy drought - and the results have been nothing short of stellar. “Clearly the market is signaling there’s an appetite for more companies to come to the public markets.” With 3 all-star companies slated for Season 2 - the next Season of Going Public is set to change the capital-raising game. Read more on why Reddit's success is a positive signal for the market: https://lnkd.in/gjZHMu5i #CapitalMarkets #InvestorRelations #GoingPublic #StrategicInvesting Disclosures: https://lnkd.in/ev_4HX_K