In addition to driving big gains in stocks like GameStop, AMC, and Robinhood, it looks like Reddit has managed to boost its own valuation by a couple of billion dollars over the past couple of months too.
How did Reddit boost its valuation?
Ok, so it’s not a public company yet, but all of the attention Reddit has been getting since the start of the year has really started paying off.
Last week, the so-called ‘front page of the internet’ announced that it had raised $410 million in private funding from Fidelity Investments at a valuation of $10 billion. This means that Reddit’s valuation has close to doubled since it last raised money just six months ago at $6.5 billion.
While it might have been seen (by some) as bad for the stock market, the whole WallStreetBets debacle earlier this year was a real boon for Reddit’s reputation. Considering such market-shaking events were driven entirely through one platform — including the collapse of a $13 billion hedge fund — the high-level of engagement and cultural currency the site commands is now clear.
So when will us mere mortals be able to invest?
Would Reddit be a good investment?
Well first of all, it’s worth pointing out that there is still a long way to go for the business. In addition to being unprofitable, Reddit brought in roughly $100 million in advertising revenue for the last quarter. When you compare that with the leviathans of online advertising like Facebook ($28.5 billion) and Google ($50+ billion), Reddit is still just a minnow.
However, management appears keen to eventually go public, with CEO Steve Huffman stating previously: “Though it is fashionable for companies to stay private longer, that is not our goal.”
Watch this space.
If you prefer to invest in less risky companies with real fundamentals behind them, MyWallSt’s got a shortlist of market-beating stocks so you can generate long-term wealth. Start your free access now.
Head of Content and Publishing at MyWallSt
James is the head of content and publishing at MyWallSt. James’ favorite stock is Teladoc because he believes that they are at the forefront of revolutionizing the healthcare industry.