The company intends to raise up to $748 million through the sale of 22 million shares, with a portion reserved for users
Reddit has disclosed that it aims for a valuation of approximately $6.5 billion at its upcoming debut on the New York Stock Exchange. According to a corporate filing with the US Securities and Exchange Commission on Monday, the company intends to raise up to $748 million through the sale of 22 million shares, priced between $31 and $34 each. This marks the largest initial public offering of a social media network in four years.
The news aggregation, content, and discussion platform had submitted a confidential filing for an IPO in 2021. However, it postponed its plans due to economic conditions and a downturn in technology stocks.
The IPO, trading under the ticker symbol RDDT, is anticipated to take place this month. It will be the most substantial social media IPO since Pinterest in 2019.
Reddit, often referred to by its founders as “the front page of the internet,” announced in the filing its intention to involve users and moderators in its IPO. The company disclosed that it had allocated 1.76 million shares, equivalent to 8% of the IPO, for sale to eligible Reddit users, specific board members, and friends and family of employees and directors.
According to Reddit, users who registered before the beginning of this year, are at least 18 years old, and reside in the US may potentially qualify for the share program.
Reddit is an online platform where users can join communities based on their interests (known as subreddits) and engage in discussions or share experiences through comment threads on various topics. As of December 2023, the company reported having 100,000 active communities and 1 billion posts.
In a letter accompanying the filing, co-founder Steve Huffman stated that the IPO would enable users to become Reddit investors while also providing capital and offering “liquidity to our employees.” He noted that the company had allocated approximately 1% of its common stock to support community-related programs.
Reddit reported in December that it had welcomed over 500 million visitors that month. It also expressed confidence in growth opportunities in advertising and data licensing as artificial intelligence and large language models continued to expand.
According to a filing last month, Reddit recorded a loss of $90.8 million in 2023, a decrease from $158.6 million in 2022, despite a 21% increase in revenue.
Reddit’s users have previously resisted the platform’s policy changes and efforts to monetize. When executives decided to start charging for access to the site’s API last June, Reddit’s volunteer moderators led a rebellion against the company, resulting in more than 8,000 subreddit communities being offline for days. The company’s IPO prospectus cited this incident as a risk factor, stating that similar actions in the future “could adversely affect our business.”
With the IPO approaching, the founder of the messaging platform Telegram has revealed that his company is considering going public. Pavel Durov, the Russian-born owner of Telegram, informed the Financial Times that the platform had amassed 900 million users, been valued at $30 billion, and had no intentions of being sold. Additionally, he stated that Telegram was on the verge of achieving profitability.