The Strategist

Reddit's estimated value reaches $6B

02/10/2021 - 09:11

Internet forum Reddit held another round of funding, the fifth in its history, in which the company managed to attract about $250 million. Now its estimated value is $6 billion, Bloomberg reports.

Antonio Zugaldia
Antonio Zugaldia
According to the forum's own announcement, the company's management felt that "now is the time to make strategic investments in Reddit, including video, advertising, consumer products and reaching out to international markets." In addition, the company announced that it is preparing to double its staff during this year.

Reddit is one of the most visited sites on the Internet, with more than 50 million daily active users. The site came into the spotlight in late January, when its users staged a flash mob of sorts. They decided to "teach a lesson" to hedge funds that were playing to downgrade the stock prices of some companies. 

It was mostly about the shares of GameStop, which sells consoles and video games, and AMC, a chain of movie theaters. As a result, GameStop stock, for example, gained nearly nine times in just one week, and its market capitalization reached $7 billion. Short-sellers who bet against it lost at least $6 billion during this time. Later, Reddit users switched to the cryptocurrency Dogecoin and silver.

Last week, U.S. regulators said they would examine the silver market for possible manipulation. In turn, the U.S. Congressional Committee on Financial Services Markets said it would hold a hearing in a remote format on February 18 on the sharp fluctuations in the stock prices of GameStop and other companies.