(Bloomberg) — A shareholder of Reddit Inc. is trying to set up a credit facility using an equity stake in the company, according to a person familiar with the matter.
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Advance Magazine Publishers Inc., the arm of the Newhouse family publishing empire that owns Conde Nast, is offering 7.8 million shares for $145.38 to $148.54 each, which would be worth as little as as much as $1.2 billion, people familiar with the matter said. The range would represent as much as an 8% discount to Reddit’s Thursday closing price of $158.02 each.
In addition, Advance is buying derivatives on the stock, allowing it to maintain its ownership stake while creating the credit facility, one of the people said.
Shares of Reddit fell as much as 7.9% in the aftermarket on Thursday after rising 16% during the regular trading day.
Details are subject to change and no final decisions have been made, the people said. An Advance representative did not immediately respond to requests for comment. The details of the block were first reported on X by The Inner Circle Trading Group.
The deal comes after Reddit’s stock price rose more than 300% since its March IPO, which raised $860 million. The social media company licenses its data to train artificial intelligence models and has partnered with companies such as Arm Holdings Plc and Astera Labs Inc. benefited from strong investor interest in the technology.
Earlier on Thursday, a unit of Tencent Holdings Ltd. announced the sale of 654,979 Reddit shares on November 19 for $88.5 million.
(Updates with details on the credit facility in the first three paragraphs and stock movements in the fourth paragraph.)
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