Reddit’s Sales Price Gets Set To $240 Million
Social bookmarking and news aggregator Reddit receives over 3 billion page views per month and 43 million monthly active users. Reddit’s valuation has shot up as a result. There has been a provision added in the incorporation paper documents from Advance Publications (parent company of Reddit’s parent company Conde Nast).
The price of Reddit has been set to $240 million as a benchmark for determining the allocation of preferred stock.
“Advance bought $20 million of convertible preferred stock in Reddit and put in provisions saying that if Reddit is ever sold for less than $240 million, the conversion terms will be rejiggered so that Advance comes away with a bigger slice of Reddit and employees get less,” stated Forbes editor George Anders in a report.
If Advance Publications ends up selling off Reddit at one point, that is a massive return on investment since they acquired Reddit for $20 million back in 2006.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry