Investing.com– Advance Magazine, a major Reddit Inc (NYSE:RDDT) shareholder, is planning to establish a credit facility using its stake in the social media platform, Bloomberg reported on Thursday.
Advance is the arm of the Newhouse family that owns several major publishing houses, including Conde Nast, and American City Business Journals.
The company is offering 7.8 million Reddit shares for $145.38 to $148.54 each, valued at as much as $1.2 billion, Bloomberg said, citing people familiar with the matter. The range is a discount of as much as 8% to Reddit’s closing price on Thursday.
Reddit’s shares slid as much as 8% in aftermarket trade, after surging 16% during Thursday’s session.
Advance plans to buy derivatives on the shares to maintain its ownership in Reddit while creating the credit facility. The firm is among Reddit’s biggest shareholders and has a roughly 30% stake in the firm.
Reddit’s shares have surged over 300% in value since their debut in March, benefiting from the company licensing its content to train artificial intelligence models.