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Reddit targets up to $6.4 billion valuation in much-awaited US IPO

Reddit targets up to $6.4 billion valuation in much-awaited US IPO

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Reddit targets up to $6.4 billion valuation in much-awaited US IPO

 Reddit is aiming for a valuation of up to $6.4 billion in its U.S. initial public offering (IPO), the social media platform said on Monday, as it nears one of the most-anticipated stock market debuts of the last few years.

The company, along with some of its existing investors, is targeting a sale of about 22 million shares, priced between $31 and $34 each, to raise up to $748 million.

The IPO, a major litmus test of investor appetite for new listings, will come more than two years after the company began preparations to go public. So far this year, the IPO market recovery has been uneven.

The targeted valuation, on a fully diluted basis, is less than the $10 billion Reddit was valued at after a fundraising in 2021.
After its launch in 2005, Reddit became one of the cornerstones of social media culture. Its iconic logo – featuring an alien with an orange background – is one of the most recognized symbols on the internet.

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Its 100,000 online forums, dubbed “subreddits”, allow conversations on topics ranging from “the sublime to the ridiculous, the trivial to the existential, the comic to the serious”, according to co-founder Steve Huffman.

Huffman himself turned to one of the subreddits for help to quit drinking, he wrote in his letter. Former U.S. President Barack Obama also did an “AMA” (“ask me anything”), internet lingo for an interview, with the site’s users in 2012.

The company’s influential communities are best known for the “meme-stock” saga of 2021, when several retail investors collaborated on Reddit’s “wallstreetbets” forum to buy shares of highly shorted companies such as video game retailer GameStop (GME.N).

The episode torpedoed hedge funds that had bet against those stocks, and made retail traders a force to reckon with. It was also featured in a 2023 film starring Seth Rogen.

To tap into the retail base, Reddit has reserved 8% of the total shares on offer for eligible users and moderators on its platform, certain board members and friends and family members of its employees and directors.

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Such buyers will not be under a lock-up period and could choose to sell their shares on the first day of trading, potentially increasing the price volatility.

“This is a unique IPO and what happens with it is going to be partly driven by the buzz on the platform,” said Reena Aggarwal, director of the Georgetown University Psaros Center for Financial Markets and Policy.

Morgan Stanley, Goldman Sachs, J.P.Morgan and Bank of America Securities are the lead underwriters for the offering. Reddit expects to list on the New York Stock Exchange under “RDDT.”

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Despite its cult-like status among followers, Reddit has lagged the success of contemporaries such as Meta Platforms’ Facebook (META.O) and Twitter, now known as X.

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The company has never turned a profit, and said in its filing earlier that it was “in the early stages of monetizing (its) business”.

Reddit had an average of 73.1 million daily active “uniques” – users who use its platform at least once a day – in the three months ended Dec. 31, 2023, it said.

The company’s approach to content moderation has also been a sticking point with advertisers.

It relies on volunteers from its user base to moderate the content posted on its forums. Moderators can decide to withdraw from their duty at any time, like during 2023, when several quit in protest over the company’s decision to charge third-party app developers for access to its data.

“There’s no question that as a public company, Reddit is going to be under much more scrutiny in terms of their platform, what’s being put out on the platform and how it’s being monitored,” Aggarwal said.

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“Regulators and policymakers are quite concerned about these issues.”

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Don’t worry if your Android gets stolen, new Theft Detection Lock comes to rescue

Don’t worry if your Android gets stolen, new Theft Detection Lock comes to rescue

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Don't worry if your Android gets stolen, new Theft Detection Lock comes to rescue

Google revealed plans to introduce a ground-breaking security feature for Android devices: Theft Detection Lock at the Google I/O 2024 developer conference held on Wednesday.

This innovative addition is specifically designed to combat the rising threat of smartphone theft by automatically locking the device when suspicious activity is detected.

Powered by artificial intelligence, Theft Detection Lock utilizes advanced algorithms to identify common motions associated with theft.

For instance, if a device suddenly begins moving rapidly in the opposite direction, indicative of a potential theft scenario, the feature swiftly triggers a screen lock mechanism.

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This proactive measure aims to thwart thieves from easily accessing sensitive user data stored on the device.

In addition to Theft Detection Lock, Google also announced the introduction of an Offline Device Lock feature. This functionality serves as a safeguard against intentional disconnection from the network, a common tactic employed by thieves to bypass security measures.

Instances such as repeated failed authentication attempts will prompt the Offline Device Lock, providing an added layer of protection for users’ devices.

Google revealed plans to enhance device security with measures aimed at preventing remote factory resets initiated by thieves.

Under the forthcoming update, if a thief attempts to reset a stolen device, they will be unable to set it up again without the necessary device or Google account credentials. This strategic move renders stolen devices essentially unsellable, significantly diminishing the incentives for phone theft.

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Tesla must face vehicle owners’ lawsuit over self-driving claims

Tesla must face vehicle owners’ lawsuit over self-driving claims

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Tesla must face vehicle owners' lawsuit over self-driving claims

A U.S. judge on Wednesday rejected Tesla’s bid to dismiss a lawsuit accusing Elon Musk’s electric car company of misleading owners into believing that their vehicles could soon have self-driving capabilities.

The proposed nationwide class action accused Tesla and Musk of having since 2016 falsely advertised Autopilot and other self-driving technology as functional or “just around the corner,” inducing drivers to pay more for their vehicles. 

U.S. District Judge Rita Lin in San Francisco said owners could pursue negligence and fraud-based claims, to the extent they relied on Tesla’s representations regarding vehicles’ hardware and ability to drive coast-to-coast across the U.S.

Without ruling on the merits, Lin said that “if Tesla meant to convey that its hardware was sufficient to reach high or full automation, the plainly alleges sufficient falsity.”

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The judge dismissed some other claims.

Tesla and its lawyers did not immediately respond to requests for comment. Lawyers for Tesla vehicle owners did not immediately respond to similar requests.

The case was led by Thomas LoSavio, a retired California lawyer who said he paid an $8,000 premium in 2017 for Full Self-Driving capabilities on a Tesla Model S, believing it would make driving safer if his reflexes deteriorated as he aged.

LoSavio said he was still waiting for the technology six years later, with Tesla remaining unable “even remotely” to produce a fully self-driving car.

The lawsuit seeks unspecified damages for people who since 2016 bought or leased Tesla vehicles with Autopilot, Enhanced Autopilot and Full Self-Driving features.

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Tesla has for many years faced federal probes into whether its self-driving technology might have contributed to fatal crashes.

Federal prosecutors are separately examining whether Tesla committed securities fraud or wire fraud by misleading investors about its vehicles’ self-driving capabilities, according to three people familiar with the matter.

Tesla has said Autopilot lets vehicles steer, accelerate and brake in their lanes, and Full Self-Driving lets vehicles obey traffic signals and change lanes.

But it had acknowledged that neither technology makes vehicles autonomous, or excuses drivers from paying attention to the roads.

The case is In re Tesla Advanced Driver Assistance Systems Litigation, U.S. District Court, Northern District of California, No. 22-05240.

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Microsoft asks hundreds of China staff to relocate

Microsoft asks hundreds of China staff to relocate

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Microsoft asks hundreds of China staff to relocate

Microsoft is asking about 700 to 800 people in its China-based cloud-computing and artificial-intelligence operations to consider transferring outside the country, the Wall Street Journal reported on Thursday.

The employees, mostly engineers with Chinese nationality, were earlier in the week offered an option to transfer to countries including the U.S., Ireland, Australia and New Zealand, the report said, citing people familiar with the matter.

The move comes amid spiralling US-China relations as the Biden administration cracks down on various sectors of Chinese imports, including electric vehicle (EV) batteries, computer chips and medical products.

A Microsoft spokesperson told the Journal that providing internal opportunities is part of its global business and confirmed the company had shared an optional internal transfer opportunity with a subset of employees. 

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Reuters reported earlier this month that the U.S. Commerce Department is considering a new regulatory push to restrict the export of proprietary or closed source AI models, whose software and the data it is trained on are kept under wraps.

The spokesperson, however, told the newspaper that the company remains committed to the region and will continue to operate in China.

Microsoft didn’t immediately respond to a Reuters request for comment.

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