Reddit's bet on Redditors
Reddit is the latest company set to test the uncertain IPO market, after the unprofitable social media company was built around an avid community of journalists, cryptocurrency devotees and reality TV fans. presented to go public.
The company is seeking a valuation of at least $5 billion, and DealBook examined its prospectus to determine its pitch to investors.
Its army of users, its large sponsors and its commitment to artificial intelligence figure prominently. The company believes that AI will help it boost its advertising sales business and generate new licensing revenue. reddit confirmed on Thursday that he had signed a deal with Google that is supposedly worth 60 million dollars a year to help the search giant train its AI models.
This will likely attract investors, given the boom in demand for AI That's driving a global stock market rally. But whether that's enough to push Reddit to profitability is a big question hanging over the stock.
Reddit power users will be able to buy at a price normally reserved for institutions. Such an arrangement is unusual โ Uber and the stock-trading app Robinhood did something similar, and a risky one (especially if, like Robinhood, the stock then tanks).
Investors should keep this in mind, Joachim Klement, investment strategist at Liberum, told DealBook. "My take on this IPO is that Reddit is struggling to make a profit and will face the challenge of getting a good valuation," he said.
WallStreetBets listed as a risk factor. Reddit's vibrant community of day traders and market watchers rose to prominence in 2021 during the meme stock frenzy that helped send shares of retailer GameStop on a wild ride. The stock's eventual collapse led to a congressional hearing about the role of social networks in fueling demonstrations, accidents and possible bubbles.
The Reddit community quickly realized the irony that its members were being treated as a risk. and a key for the listing. "In the meantime, they are inviting WSB users to participate in their IPO." a user noticed.
Here are other details from your prospectus:
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Its largest shareholders include Advance Magazine Publishers, Tencent Cloud Europe, Fidelity Management, and OpenAI's Sam Altman, a former Reddit board member. His bet would be valued at 435 million dollars if Reddit reaches its $5 billion valuation target.
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The main underwriters are Morgan Stanley, Goldman Sachs, JP Morgan and Bank of America.
THIS IS WHAT'S HAPPENING
Nvidia stock price rise sets record. The chipmaker added $277 billion in market value on Thursday, the biggest one-day gain for a U.S.-listed company, after its spectacular earnings report. The results helped manifestations of power in both the S&P 500 and the Nasdaq composite and have put Jensen Huang, CEO of Nvidia, on the verge of becoming one of the 20 richest people in the worldaccording to Bloomberg.
The lander of a new space company reaches the moon. The Odysseus robotic spacecraft became the first American vehicle on the moon since 1972 and the first commercially produced one to be manufactured there. Shares of Intuitive Machines, which went public last year through a blank-check fund, rose 44 percent in premarket trading.
New research questions Meta and children's safety. The Wall Street Journal reports that officials at the social media giant pointed out how adults were abusing Facebook and Instagram subscription tools. seeking to exploit their own children. And The Times examined how thousands of parent-run accounts featuring girls and run as influential businesses are followed by dozens of adult menmany of whom admit to being sexually attracted to children.
Do telecommunications companies need more regulation?
The hours of duration AT&T wireless network collapse It left tens of thousands of customers without service and cut off 911 and other emergency services. (Verizon and T-Mobile customers also reported problems, although they may have been due to them constantly calling back AT&T users.)
That chaos underscores how, with only three major wireless providers, the United States relies on a small number of companies for a crucial service. While providers are regulated by the FCC, should they face stricter scrutiny? That question is already being whispered among Washington policymakers.
Telecommunications companies would respond strongly, arguing that this was a one-time event and that they are financially incentivized to avoid closures. The industry also has a lot of weight in Washington: it managed rejected an offer from the FCC in 2008 requiring eight hours of backup power for cell sites, following outages caused by Hurricane Katrina.
But the damage caused by such cuts can be great. An important lesson from the pandemic is that we are more dependent than ever on the private companies that drive our economy. (At least one restaurant had to turn away breakfast customers because it couldn't process payments, The Times reported.)
There is also a national security risk, and some observers worry whether a cyberattack was to blame this time. AT&T told ABC News that a software updateThe culprits were the hackers, not the hackers.
The Saudis are back in Miami
Some of the country's most powerful bankers and executives have flocked to Miami Beach this week to meet with Saudi Arabia's investment chiefs, hoping to tap into the kingdom's billions.
The packed meeting at the Future Investment Initiative is a further sign that the tense politics between Riyadh and Washington is not dampening the appetite for negotiating deals. (One attendee called it โcrackโ to American financiers.) Here's what DealBook's Lauren Hirsch picked up on the scene:
Saudi spending is changing. Yasir Al-Rumayyan, host and director of the Saudi Public Investment Fund, said the sovereign wealth fund planned to reduce its exposure to international investment from 30 percent to 20 to 25 percent. (Instead, the focus is on huge national projects, including the 2034 World Cup.) But the amount of money you plan to spend will grow to $70 billion annually next year, up from about $50 billion today.
One major investor told DealBook that given the fund's growing domestic focus, it planned to do more transactions in the kingdom.
First-class guests from the world of money and politics mingled in the courtyard of a hotel. Jared Kushner, Donald Trump's son-in-law, gathered at a corner table while Steven Mnuchin, Trump's Treasury secretary, sat at a table with Jenny Johnson, the CEO of Franklin Templeton. Also there were Michael Dell, former SoftBank executive Marcelo Claure, private equity mogul Robert Smith and Gwyneth Paltrow (who is raise a venture fund.)
Artificial intelligence was an important topic on and off stage. One executive told DealBook that people weren't fully appreciating how many layoffs the technology will bring. Another recounted conversations in which other corporate leaders spoke enthusiastically about AI-powered cost cuts.
Talking about geopolitics came to the stage, Unlike Riyadh conference in Octoberwhich one attendee called in spirit โDisney Land.โ
Mike Pompeo, Trump's secretary of state, expressed concern about Iran and touted the Abraham Accords, agreements normalizing Israeli relations with several Arab countries that Pompeo helped negotiate.
What to pay attention to in Buffett's big card
Saturday is a big day for Berkshire Hathaway: The conglomerate will release both its annual report and Warren Buffett's latest letter to investors. As they have for decades, followers of the Oracle of Omaha will pore over what he has to say about economics, investing, and more.
But Saturday's letter has special significance, largely because it is the first since the death late last year of Charlie Munger, Buffett's long-time business partner. Here's what you should keep in mind.
What will Buffett say about Munger? Munger, long known as Buffett's alter ego, was happy to be seen as Berkshire Hathaway's sarcastic but shrewd second fiddle.
Many expect tributes from Buffett. "For a person who is not normally very emotional, this is very difficult," Bill Smead, president of Smead Capital Management and a Berkshire investor for decades, told DealBook. Munger, Smead added, was "their cornerstone of business."
What are Berkshire's plans for its "elephant gun" cash hoard? Buffett built the company's considerable wealth from large acquisitions, using the enormous amounts of money generated by its insurance operations.
That cash pile totaled more than $157 billion in the third quarter, as Buffett increasingly prefers buying back Berkshire shares to making big deals. (Berkshire's last major acquisition was purchase plagued by litigation from Pilot Travel Centers.) Buffett may write that he now plans to dust off that gun, but he's just as likely to favor keeping it in the safe.
How will Berkshire prepare for the future? Munger's passing was another reminder that Buffett himself is 93 years old. He has laid out his succession plans, including identifying Greg Abel as the company's next CEO and Todd Combs and Ted Weschler as his top stock pickers.
But some Berkshire investors want to know more. Smead said he'd like to learn more about how Combs and Weschler have performed โ what Buffett is doing to "prepare us to trust each other." them.
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Offers
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Judge Overseeing FTX Bankruptcy Case Will Allow Fallen Crypto Exchange sell your shares in Anthropic, the private artificial intelligence startup. (Reuters)
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supposedly there is no breakup fee that would be owed to Capital One or Discover if regulators block their $35.3 billion transaction. (CNBC)
Policy
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The International Brotherhood of Truckers gave $45,000 to the Republican Party, the union's first major donation to the Republican Party in years. (WaPo)
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TO McKinsey-led think tank He is said to have made recommendations to Beijing that were adopted in a โMade in China 2025โ policy that stoked tensions with Washington. (FOOT)
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