Reddit Inc. and its investors are aiming to raise up to $748 million in one of the most significant initial public offerings (IPOs) this year. The plan involves selling 22 million shares at a price range of $31 to $34 each, potentially valuing the social media platform at $6.5 billion. Notably, around 1.76 million shares in the IPO will be reserved for users and moderators who created accounts before Jan. 1, and these shares won’t have a lockup period.
Reddit’s journey towards its IPO has seen fluctuations, with initial confidential filings in 2021 and subsequent valuations ranging from $10 billion to $15 billion. Despite a net loss of $91 million in 2023, the company reported 73.1 million daily active unique visitors in Q4 2023.
The IPO is led by Morgan Stanley, Goldman Sachs, JPMorgan Chase, and Bank of America. Reddit’s CEO, Steven Huffman, highlighted growth opportunities in advertising and the early stages of allowing third parties to license data for AI model training. Huffman owns 3.5% of voting power, and major stakeholders include Advance Magazine Publishers, FMR LLC, Tencent Holdings, and entities affiliated with OpenAI CEO Sam Altman. The IPO is closely watched, especially after members of the WallStreetBets forum voted to boost a post about shorting Reddit’s stock, citing concerns ranging from lack of profitability to competition.
The IPO landscape is significant, given recent market dynamics and the varying fortunes of tech companies going public. The listing of Reddit will be a key event, impacting the decisions of other potential IPO candidates like Rubrik Inc. and Waystar Technologies Inc.
