IPO-bound Reddit discloses patent infringement complaint from Nokia
Reuters
Published Mar 19, 2024 22:06
Updated Mar 20, 2024 04:24
(Reuters) -Reddit is evaluating a letter from Nokia (HE:NOKIA) Technologies alleging it infringed some of the telecom and cloud network firm's patents, the social media platform said on Tuesday, ahead of its high-profile initial public offering (IPO) this week.
The disclosure follows an inquiry by the Federal Trade Commission focused on Reddit's sale, licensing and sharing of user-generated content with third parties to train artificial intelligence models.
"Nokia is seeking compensation for the use of (its) key inventions and will reinvest the royalties in the development of next-generation communication and multimedia technologies," the company said in a statement.
Reddit, which has been involved in patent infringement litigation in the past, is targeting a valuation of up to $6.5 billion for its IPO in one of the most-anticipated share sales in recent years.
"As we face increasing competition and become increasingly high profile, the possibility of receiving more intellectual property claims against us grows," Reddit warned in its statement.
The IPO is between four and five times oversubscribed, Reuters reported on Sunday, making it more likely to attain the target valuation. It is expected to debut on the New York Stock Exchange on March 21.
Reddit's 100,000 online forums, dubbed "subreddits," are known for the "meme-stock" saga of 2021 when retail investors collaborated on its "wallstreetbets" forum to buy shares of highly shorted companies such as video game retailer GameStop (NYSE:GME).
To tap into its popularity among retail investors, the company 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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Written By: Reuters
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