Reddit filed confidentially for its IPO in December 2021 and is planning to make its public filing in late February, followed by a roadshow in early March, with the goal of completing the IPO by the end of March
Social media platform Reddit is reportedly gearing up for its initial public offering (IPO) in March, marking the first major IPO of a social media company since Pinterest in 2019. The move comes amid heightened competition for advertising dollars from platforms like TikTok and Facebook.
Reddit, valued at about $10 billion in a 2021 funding round, is said to be seeking to sell approximately 10 per cent of its shares in the IPO, aiming for a valuation closer to the time of listing. The company filed confidentially for its IPO in December 2021 and is planning to make its public filing in late February, followed by a roadshow in early March, to complete the IPO by the end of March.
The IPO will test the willingness of Reddit’s user base to support the company’s stock market debut. Reddit users have played a role in fueling “meme” stock rallies for companies like GameStop and AMC Entertainment Holdings in recent years.
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Founded in 2005, Reddit is known for its niche discussion groups and user voting system. The San Francisco-based company generates revenue primarily through advertising and offers premium access for a subscription fee. Despite its popularity, Reddit has yet to turn a profit, with losses attributed to platform investments and lower user engagement with advertising compared to other social media platforms.
Reddit’s IPO plans have been delayed in the past, and while it is currently targeting March, the sources caution that the timeline could be subject to change.
In 2023, Reddit is expected to generate over $800 million in advertising revenue, marking a more than 20 per cent increase from the previous year. The company’s decision to charge companies for access to its application programming interface (API) last year stirred controversy among users who rely on third-party apps to access Reddit.
As social media stocks rebounded over the past year, driven by a rally in technology stocks, large platforms like Meta Platforms (Facebook) and Snap have seen significant increases in their stock values.
(With inputs from agencies)