CBS News
Reddit to raise nearly $750 million in an IPO and offer shares to Redditors. Here’s how it will work.
Reddit said it’s aiming to raise $748 million in its initial public offering, which will also offer shares to the social media company’s users and moderators as a way to allow them to participate in the stock sale.
In a regulatory filing on Monday, Reddit said it will sell about 22 million shares priced about $31 to $34 each. Based on its total number of shares outstanding, the transaction would value Reddit at $5.4 billion.
Reddit’s IPO, while typical for a tech company seeking to raise more money to fuel its expansion, is unusual in that it’s setting aside a significant number of shares to offer its own users. In the company’s filing, CEO Steve Huffman noted that the service was built on the efforts of its community, such as moderators and users, and that Reddit wants them to be able to participate in publicly owning the business.
“We hope going public will provide meaningful benefits to our community as well. Our users have a deep sense of ownership over the communities they create on Reddit,” Huffman wrote in a letter published in the filing.
He added, “We want this sense of ownership to be reflected in real ownership — for our users to be our owners. Becoming a public company makes this possible. With this in mind, we are excited to invite the users and moderators who have contributed to Reddit to buy shares in our IPO, alongside our investors.”
Here’s what to know about Reddit’s IPO
Why is Reddit going public?
Reddit said it’s going public to fund its operations and potentially to expand, noting in the filing that it could use the proceeds for “strategic opportunities,” although for now the platform is not planning any investments or acquisitions.
Why is Reddit offering shares to “Redditors”?
Reddit said it is reserving 1.76 million shares, or 8% of the stock it’s selling in the IPO, to its Redditors, which is what it calls its users.
The shares will be sold to Redditors, according to the filing. That’s unusual because companies going public typically reserve their IPO shares for big institutional investors, such as investment firms and banks. It’s very unusual for a company’s users to be included in a public stock sale.
Which Redditors will be offered shares in the IPO?
Only certain Redditors will be given a chance to buy stock in the IPO, according to the filing.
The company said it will invite some users and moderators to participate in the IPO in “six phased priority tiers.” Users will be invited based on their “karma,” which is their reputation score on the site. Moderators will be measured by their moderator actions, the filing said.
“If demand for the directed share program in an earlier tier exceeds capacity, eligible users and moderators will have the option to join a waitlist,” Reddit said. “An invitation to participate in the directed share program does not guarantee that the participant will receive an allocation of shares.”
Additionally, users and moderators must have created an account before January 1, 2024, and reside in the U.S. and be at least 18 years old, the filing said. Current or former Reddit employees are excluded from the offer, it added.
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CBS News
$100 million in federal funds released for North Carolina to rebuild roads, bridges damaged by Helene
Washington, D.C. – The U.S. Department of Transportation released $100 million in emergency funds on Saturday for North Carolina to rebuild its roads and bridges damaged by Helene.
“We are providing this initial round of funding so there’s no delay getting roads repaired and reopened, and re-establishing critical routes,” said U.S. Transportation Secretary Pete Buttigieg in a statement. “The Biden-Harris administration will be with North Carolina every step of the way, and today’s emergency funding to help get transportation networks back up and running safely will be followed by additional federal resources.”
The storm caused rampant flooding that has devastated several towns and killed more than 225 people – with CBS News confirming at least 114 people killed in North Carolina. There was more than 8 inches of rain across the western North Carolina mountains, with some areas seeing more than a foot.
Hundreds of roads across Western North Carolina remain closed, leading to an increase in air traffic as teams scour the region for survivors by air. Air traffic over Western North Carolina has increased by 300% due to relief efforts since the storm cleared, the Federal Aviation Administration and the North Carolina Department of Transportation.
Mudslides blocked Interstate 40 and other highways in North Carolina and about 400 roads were closed due to damage from Helene. Interstate 40 was damaged at several locations, the Department of Transportation said.
President Biden visited the Carolinas on Wednesday, surveying the flood damage by air from Greenville, South Carolina, to Asheville, North Carolina. Mr. Biden announced the federal government would cover “100%” of all debris removal and emergency protective measure costs in North Carolina for six months.
The Department of Transportation said these relief funds will allow the North Carolina Department of Transportation to act more quickly to fund eligible repairs to their damaged facilities.
Li Cohen and
contributed to this report.
CBS News
Tropical Storm Milton forms in Gulf; forecast to strengthen into hurricane headed toward Florida
Tropical Storm Milton has formed in the Gulf of Mexico and is forecast to strengthen into a hurricane headed toward Florida with possible impacts to its western coast, the National Hurricane Center said on Saturday. Maximum sustained winds are expected to be at 40 mph with higher gusts and Milton is currently moving north-northeast, NHC said in an advisory.
Milton is forecast to undergo a period of rapid intensification before it makes landfall as a Category 2 hurricane across Florida’s west coast, CBS News Miami reported.
The forecast comes a little more than a week after Hurricane Helene made landfall in Florida and across the Southeast, killing more than 200 people and causing immense destruction. President Biden on Thursday took an aerial tour of Florida’s Big Bend where Helene struck as a Category 4 storm. Hundreds of people are still missing and Mr. Biden said the work to rebuild will cost “billions of dollars” as communities suffer still without power, running water and passable roads.
NOAA
Milton is forecast to move across the southwestern Gulf of Mexico through Sunday night then across the south-central Gulf on Monday and Tuesday before reaching Florida’s west coast by the middle of the week, NHC said. Heavy rain is possible in the region starting Sunday into Monday, CBS Miami reported, and more rain and heavy winds will most likely arrive on Wednesday. Hurricane and storm surge watches will most likely be required for portions of Florida starting Sunday, the National Hurricane Center said.
Along with the heavy rainfall, the hurricane center said to expect risks of flooding.
Residents in the area should ensure they have a hurricane plan in place, the National Hurricane Center said, follow the advice of local officials and check back for forecast updates.
