Reddit is navigating choppy waters in the days leading up to its long-awaited initial public offering (IPO).

What Happened: Nokia Technologies sent a letter to Reddit alleging that the San Francisco-based social media company infringed some of its patents.

A Reuters report indicates that Reddit is currently “evaluating” Nokia’s letter. There was no further information provided on the patents.

The disclosure comes just days after Reddit received an inquiry from the Federal Trade Commission concerning the company’s AI-related deals.

Specifically, the FTC is reportedly focused on how Reddit sells, licenses and shares user-generated content with third parties for training large language models.

“As we face increasing competition and become increasingly high profile, the possibility of receiving more intellectual property claims against us grows,” Reddit reportedly said in a statement.

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Why It Matters: Reddit is set to make its public debut this week. The company is targeting a valuation of up to $6.5 billion, down from the $10 billion valuation it received in a private fundraising round in 2021.

Reuters reported over the weekend that the IPO is between four and five times oversubscribed, suggesting the company is likely to attain the $6.5 billion valuation it is seeking, or at least price in the target range of $31 to $34 per share.

Pricing for the IPO is set to kick off in New York on Wednesday. Reddit stock will be listed on the New York Stock Exchange on Thursday and trade under the ticker symbol "RDDT."

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