Updated January 18th, 2024 at 19:17 IST
Reddit plans IPO launch in March, aiming for $10 billion valuation
Having confidentially filed for the IPO in December 2021, Reddit is set to make its public filing in late February and kick off its roadshow in early March.
Reddit IPO: San Francisco-based social media platform Reddit is gearing up for its long-anticipated initial public offering (IPO) in March, marking the first major IPO in the social media sector since Pinterest's debut in 2019. Reddit, valued at about $10 billion in a 2021 funding round, is aiming to sell approximately 10 per cent of its shares in the IPO, news agency Reuters reported quoting sources.
Having confidentially filed for the IPO in December 2021, Reddit is set to make its public filing in late February, kick off its roadshow in early March, and complete the IPO by the end of March. The IPO plans may face delays, the report added, acknowledging past instances.
The move comes as Reddit and its peers grapple with fierce competition for advertising dollars from platforms like TikTok and Facebook. Reddit, known for its niche discussion groups and user-driven content voting, plans to test the loyalty of its users who have previously fueled "meme" stock rallies, including GameStop and AMC Entertainment Holdings.
Founded in 2005, Reddit generates revenue primarily through advertising and offers premium access for $5.99 per month. Despite its valuation, the company has yet to turn a profit, citing investments in the platform and lower user engagement with advertising compared to other social media.
The company plans to decide on the IPO valuation closer to the listing, aiming to raise funds to support its growth strategies. Reddit anticipates generating over $800 million in advertising revenue in 2023, reflecting a more than 20 per cent increase from the previous year.
While large social media stocks, including Meta Platforms (Facebook) and Snap, have rebounded over the past year, Reddit's IPO will be closely watched to see how the market responds, given its unique user-driven dynamics and past meme stock incidents.
(With Reuters inputs.)
Published January 18th, 2024 at 19:17 IST