REDDIT posted a more than 20 per cent rise in revenue in 2023 versus the year before, sources familiar with the situation said, as it prepares for one of the United States’ most anticipated potential initial public offerings (IPOs).
REDDIT posted a more than 20 per cent rise in revenue in 2023 versus the year before, sources familiar with the situation said, as it prepares for one of the United States’ most anticipated potential initial public offerings (IPOs).
I don’t really get how these “IPOs” work. Someone actually has to pay that money for Reddit, right? Even if they manage to get Reddit temporarily profitable, are people really going to get fooled into investing just from that? Or are they guaranteed to get whatever Reddit’s value is at the time of the IPO somehow?
IPOs are typically a cash grab. Stock is offered for purchase at a price, and usually there’s a bump in price. The first investors will sell for a profit at peak price, and then it will drop to whatever value the market decides. And that could be higher or lower than the initial price per share.
RedditThe current owners set the offer price, and tries to argue for why it’s worth that much. It’s up to investors to sign up to buy. If not enough investors sign up, the deal won’t go through and Reddit has to go back to the drawing board.You’d hope investors would see through the facade and not sign up unless it’s dirt cheap, and maybe they will. There are plenty of dumb investors though.