Shareholders plan to cash out $1.2 billion by selling 7.8 million shares of Reddit (RDDT.US)
1min read "Reddit, the 'Chinese equivalent of Baidu's Tieba' fell more than 6% before the US market on Friday. On the news front, Advance Magazine Publishers, Reddit's shareholder, is seeking to sell 7.8 million Reddit shares at a price of $145.38-$148.54 to raise up to $1.2 billion.
According to the reports, Advance Magazine Publishers is seeking to use Reddit's stock to establish a credit tool while buying derivatives of Reddit's stock to indirectly maintain its ownership shares. Data shows that Advance Magazine Publishers held about 24% of Reddit's Class A and B common stock as of September 30.
However, Advance Magazine Publishers said in a filing on Thursday: "Advance Magazine Publishers has not sold, and does not intend to sell, any shares of the issuer for any reason, including in connection with the transaction, and intends to continue as a long-term shareholder of the issuer."
Moreover, Tencent disclosed that it sold a large stake in Reddit. According to a filing submitted to the US Securities and Exchange Commission (SEC), Tencent sold 655,000 Reddit shares at an average price of $133.76 on November 19, and sold 882,600 shares at an average price of about $129.38 from November 14 to November 18, and sold nearly 1.5 million shares at an average price of $132.19 from November 11 to 13. After the total sale of more than $400 million, Tencent's stake in Reddit was reduced to 7.75 million shares.