Reddit Stock Drops as Advance Reportedly Plans To Borrow Against Stake | Global News Avenue

reddit(RDDT) Shares of Advance Magazine Publishers fell on Friday after reports that the company planned to borrow against its stake in the social media platform and regulatory filings revealed a sale of shares by Chinese conglomerate Tencent Holdings.

Advance Magazine Publishers, parent company of Conde Nast and its brands Q and vanity fairThe company will issue 7.8 million Reddit shares at a discount, “valued at up to $1.2 billion,” to establish a credit line, according to a report Thursday. Bloomberg.

“Additionally, Advance is purchasing derivatives on the shares that will allow it to maintain its ownership stake while allowing it to establish credit facilities,” the report said.

The magazine group disclosed plans to sell 10 million shares with a market value of $1.58 billion, according to a filing with the U.S. Securities and Exchange Commission. Securities and Exchange Commission (SEC) after the market close on Thursday.

Tencent continues to sell Reddit stock

With Advance’s planned sales, Chinese conglomerate Tencent Holdings It disclosed its latest series of stock sales on Thursday, the third such filing this month.

The company sold just over 650,000 shares earlier this week, reducing its holdings to about 7.7 million shares from about 10.7 million shares earlier this month. Based on the recent share price of about $144 on Friday, down from Thursday’s record intraday high of $158.49, Tencent’s stake is worth about $1.1 billion.

In a separate filing earlier this month, Reddit Chief Executive Officer (CEO) Steve Huffman and Chief Operating Officer (COO) Jennifer Wong also sold shares.

Reddit shares have recently fallen more than 8%, but are still nearly three times the stock’s closing price of $50.44. first day trading follow its Initial Public Offering (IPO) March.