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Reddit is seeking a valuation of up to $6.4 billion in its upcoming flotation on the New York Stock Exchange.
The social media platform’s IPO is inching closer. The launch, under the ticker RDDT, is expected by the end of this month, making it one of the most-anticipated listings in recent times.
Reddit is a San Francisco-based mega-website that combines elements of social media, message boards, and news aggregation. It was founded in June 2005 by Steve Huffman and Alexis Ohanian, who sold the platform to Condé Nast the following year. Huffman left the company in 2009 before returning as CEO in 2015.
The company wants to sell around 22 million shares, priced between $31 and $34 each, raising up to $748 million in the process, as detailed in a corporate filing posted to the US Securities and Exchange Commission on Monday.
Background to Reddit IPO
A March IPO launch was mooted back in January, and now that is coming to fruition. The offering has been in the making for two years and is considered a major test of the market for new listings.
Reddit plans to invite users and moderators to the party, with 1.76m shares set aside (8% of the IPO) for those who have built up the platform to this point, as well as board members and their family and friends.
The mega-site is said to have 100,000 active communities, with 500 million unique visitors hosted in December 2023 alone.
Its recent prospectus detailed OpenAI CEO Sam Altman’s holding of 8.7% of the company’s share stock, making him the third-largest shareholder of Reddit. This puts him in a position to profit significantly from the IPO. Still, further to that, it questions the platform’s future direction with such a prominent link to one of the leading figures in artificial intelligence (AI).
The prospectus included Reddit’s plans to utilize opportunities presented by AI. Still, some have questioned at what cost with a general user expressing fears on the future direction of travel for the site, with concerns going public will irrevocably change the platform.
“When the most important customers shift from (users) to shareholders, the product always (suffers).
“It becomes ‘what can we do this quarter to squeak out an additional point of revenue,’ instead of ‘how can we make this product better’.”
