By Echo Wang

NEW YORK (Reuters) -Reddit's initial public offering is currently between four and five times oversubscribed, people familiar with the matter said on Sunday, making it more likely the social media platform will attain the $6.5 billion valuation it seeks.

While the oversubscription does not guarantee a strong performance in the stock market debut, it means the company is poised to at least reach its targeted price range of $31 to $34 per share when it prices the IPO in New York on Wednesday, the sources said.

The sources said the marketing of the IPO was continuing and asked not to be identified because the details are confidential. A Reddit spokesperson declined to comment.

Reddit has already curbed its valuation expectations after it was valued in a $10 billion private fundraising round in 2021. The company's IPO is currently seeking to raise as much as $748 million.

Despite the loyalty of many of its users, Reddit has lost money every year since its launch in 2005 and has lagged the commercial success of contemporaries such as Meta Platforms' Facebook and Twitter, now known as X.

The focus of many Reddit users on niche subjects and the platform's somewhat loose approach to content moderation has been a sticking point with some advertisers. Reddit relies on volunteers from its user base to moderate the content posted on its forums.

Moderators can decide to withdraw from their duty at any time, as in 2023, when several quit in protest over Reddit's decision to charge third-party app developers for access to its data.

Reddit's 100,000 online forums, dubbed "subreddits," allow conversations on topics ranging from "the sublime to the ridiculous, the trivial to the existential, the comic to the serious," according to co-founder and chief executive Steve Huffman.

The company's influential communities are best known for the "meme-stock" saga of 2021 when several retail investors collaborated on Reddit's "wallstreetbets" forum to buy shares of highly shorted companies such as video game retailer GameStop.

To tap retail investors, Reddit 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.

Reddit had an average of 73.1 million daily active "uniques" - users who use its platform at least once a day - in the three months ended Dec. 31, 2023, according to a regulatory filing.

(Reporting by Echo Wang in New YorkEditing by Chris Reese)