TENCENT HOLDINGS ADR (TCEHY), (AMC) – Could a planned Reddit IPO add value to Tencent? What investors need to know

A Reddit IPO could be one of the most important topics in the stock market for 2022. A publicly traded conglomerate could benefit from the IPO, thanks to its participation in multiple rounds.

What happened: Reddit filed documents to be made public. The move comes after the company was valued at $ 10 billion earlier this year.

According to Crunchbase, Reddit had eight rounds, bringing in $ 1.3 billion from 28 different investors.

Among Reddit’s top investors is Tencent Holdings (OTC: TCEHY), which participated in the roundtables in 2019 and 2020.

Other key Reddit investors include Sequoia Capital, Andreessen Horowitz, Fidelity and Vy Capital.

A 2019 Series D funding round that valued Reddit at $ 3 billion was LED by Tencent, which invested $ 150 million of the $ 300 million raised at the time.

Related Link: Reddit Valued At $ 10 Billion, Founder Alexis Ohanian Shares Thoughts On The Community

Why this is important: Tencent has a reported 5-10% stake in Reddit thanks to its multiple investments in the company.

A well-received Reddit IPO and valuation above $ 10 billion could prove to be a catalyst for Tencent thanks to its stake in the company. Reddit’s value could be calculated in an estimate of Tencent’s sum of parts, or the conglomerate could choose to sell Reddit’s stake after the IPO lock-in period ends.

Tencent will be one of the limited ways for investors to gain exposure to Reddit ahead of the IPO, which could increase shares around the time of the IPO.

Reddit reported 366 million posts to its site from January through November, up 19% year-over-year. Comments on posts increased 12% year-on-year to $ 2.3 billion.

Thanks to the popularity of WallStreetBets and its role in the stock price development stories for GameStop Corp (NYSE: GME) and AMC Entertainment Holdings (NYSE: AMC), Reddit has become an even bigger trending name in the investment world.

Reddit’s IPO could see strong demand from retail traders and funds, knowing the value of demand for stocks.

Price Action: Tencent shares are down 21% year-to-date and closed at $ 56.24 on Friday. Shares hit a high of $ 99.40 in February 2021, and the company was set to join the trillion dollar market cap club.

Related Link: Alibaba, JD, Tencent and Nio Rivals Li Auto, Xpeng Fall in Hong Kong on Renewed Real Estate Sector Problems

Photo: Courtesy of redditinc.com

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


Source link

Comments are closed.