Advance Plans to Borrow Against $1.2 Billion Reddit Stake

(Bloomberg) — A Reddit Inc. shareholder is seeking to establish 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 valued at as much as $1.2 billion, people familiar with the matter said. The range would represent a discount of as much as 8% to Reddit’s closing price on Thursday of $158.02 each.

Separately, Advance is buying derivatives on the shares, which will allow it to maintain its ownership stake while enabling it to create the credit facility, one of the people said.

Reddit shares fell as much as 7.9% in the aftermarket on Thursday, after having climbed 16% during the regular trading day.

Details could change and no final decisions have been made, the people said. A representative for Advance didn’t 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 has climbed more than 300% since its IPO in March, which raised $860 million. The social media firm licenses its data to train artificial intelligence models, and has benefited alongside companies including Arm Holdings Plc and Astera Labs Inc. from the surge of investor interest in the technology.

Earlier on Thursday, an arm of Tencent Holdings Ltd. disclosed the sale of 654,979 Reddit shares on Nov. 19 for proceeds of $88.5 million.

(Updates with details of credit facility in first three paragraphs and share move in fourth paragraph.)

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