Title: Reddit Aims for $6.5 Billion Valuation in Upcoming IPO, Marking First Major Tech Offering of the Year

In its upcoming Initial Public Offering (IPO), social media platform Reddit is seeking a valuation of up to $6.5 billion, according to a source familiar with the matter. The company, which filed to go public in February, plans to trade on the New York Stock Exchange under the ticker symbol RDDT.

If successful, Reddit's IPO will be the first major tech offering of the year and the first social media IPO since Pinterest's debut on Wall Street in 2019. The company aims to price its IPO shares between $31 and $34 each, the source revealed. This information was initially reported by The Wall Street Journal.

During the IPO, employees will have the opportunity to sell Reddit stock, as per the source. Earlier this year, the company raised $1.3 billion in a funding round, giving it a private market valuation of $10 billion.

Notable shareholders in Reddit include Tencent and Advance Magazine Publishers, the parent company of Condé Nast. The latter acquired Reddit a year after it was founded by Alexis Ohanian and Steve Huffman, only to spin it out as an independent company in 2011.

According to Reddit's IPO prospectus, the platform generated $804 million in annual revenue in 2023, marking a 20% year-over-year increase from $666.7 million. The net loss for 2023 narrowed to $90.8 million compared to $158.6 million in the previous year.

In the lead-up to the IPO, Reddit has taken steps to include its non-employed forum moderators, known as Redditors, through a "directed share program." This program allows community members to participate in the IPO at the offering price.

Last year, Reddit faced criticism from some of its moderators who locked their communities (subreddits) due to disagreements over changes to the company's application programming interface (API). The company had planned to increase API access fees for certain third-party developers. Reddit justified these changes by citing the use of its data by tech companies for training language models similar to OpenAI's GPT-family of software.

In an effort to diversify its revenue streams, Reddit is developing a data-licensing model to accompany its core online advertising business. The company recently announced an expanded partnership with Google, granting the tech giant access to Reddit's data.

The timing of Reddit's IPO is notable given the historically slow stretch for IPOs, influenced by concerns over interest rates and global economic uncertainty. However, experts, including John Tuttle, the vice-chair of the New York Stock Exchange, anticipate an improvement in the IPO market in 2024, pointing to a robust pipeline of offerings across various sectors and geographies.

Reddit's foray into the public markets is set to be closely watched as investors assess its potential for long-term profitability and growth.