Advance Magazine, a significant shareholder in Reddit Inc , is reportedly seeking to establish a credit facility backed by its stake in the social media platform, Bloomberg reported on Thursday.
As the publishing arm of the Newhouse family, Advance owns prominent media entities, including Condé Nast and American City Business Journals.
The company plans to offer 7.8 million Reddit shares at a price range of $145.38 to $148.54 each, valuing the stake at up to $1.2 billion, according to sources cited by Bloomberg. This pricing represents a discount of up to 8% compared to Reddit’s closing price on Thursday.
Following the news, Reddit’s shares dropped as much as 8% in aftermarket trading, despite having surged 16% earlier in the day.
To maintain it approximately 30% ownership in Reddit while securing the credit facility, Advance intends to purchase derivatives on the shares. The firm is one of Reddit’s largest stakeholders.
Reddit’s stock has soared over 300% since its debut in March, driven in part by the platform’s monetization of its content for training artificial intelligence models.
