Reddit (RDDT) stock sank Friday on a report Advance Magazine Publishers planned to borrow against its stake in the social media platform and regulatory filings disclosed Chinese conglomerate Tencent Holdings sold shares.
Advance Magazine Publishers, the parent company of Conde Nast and its brands like GQ and Vanity Fair, is offering 7.8 million of its Reddit shares at a discounted price, "valued at as much as $1.2 billion," to establish a line of credit, according to a Thursday report from Bloomberg.
"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," the report said.
The magazine conglomerate disclosed plans to sell 10 million shares of its stake with a market value of $1.58 billion, according to a filing with the Securities and Exchange Commission (SEC) after markets closed Thursday.
Along with the planned sale from Advance, Chinese conglomerate Tencent Holdings disclosed its latest series of sold shares on Thursday, the third such filing this month.
The company sold just over 650,000 shares earlier this week, bringing the company's stake to about 7.7 million shares, down from roughly 10.7 million shares earlier this month. At Friday's recent price around $144, down from Thursday's record intraday high of $158.49, Tencent's stake is worth around $1.1 billion.
In separate filings earlier this month, Reddit Chief Executive Officer (CEO) Steve Huffman and Chief Operating Officer (COO) Jennifer Wong also sold shares.
Reddit shares recently were down more than 8% but still nearly triple the $50.44 price where the stock closed on its first day of trading following its initial public offering (IPO) in March.
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