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Reddit's valuation is insane right now, they got in before the "correction" so it's at some absurd multiple. Anyone trying to buy Reddit would need to basicall
by Zetice 3y ago
Reddit's valuation is insane right now, they got in before the "correction" so it's at some absurd multiple.
Anyone trying to buy Reddit would need to basically lowball the hell out of them and make the case that an IPO will only be worse (which may or may not be true).
- mr_00ff00 3y agoMaybe I am missing something about IPOs here, but if Reddit’s valuation is way off because it was before the correction, wouldn’t it be easy to argue your low ball offer is the real value? Even if they IPO, wouldn’t the stock immediately crash if it’s overvalued?
- OkayPhysicist 3y ago> Even if they IPO, wouldn’t the stock immediately crash if it’s overvalued? Yes, this is effectively guaranteed at this point. The hope of the investors is presumably that they will be able to sell fast and early.
- addandsubtract 3y agoTo whom though? Not even WSB will be touching those shares.
- Quarrel 3y agois this correct? It doesn't sound right. It last raised money at $10B in 2021, but Fidelity, who led that round have since cut that valuation on their own books back to $6B. I would not be surprised if that is a conservative number. The market has moved and reddit hasn't been going in the right direction. While that's still a lot of money, it is unprofitable, so a trade sale would make some sense. The real issue is that it comes with a lot of reputational baggage that a lot of public companies would not want.
- Zetice 3y agoI still think $6B falls into "insane", but that's my unqualified opinion, so it may not be correct. That said, I also don't think they're willing to accept the idea that even $6B might be high, so I don't think anyone would be successful with a meaningfully lower offer.