Social media platform Reddit is preparing to launch an initial public offering (IPO) in March at a valuation of $10 billion, moving forward with a listing it has been pursuing for more than three years, people familiar with the matter told Reuters. Ta.
If the discussion site goes ahead with its long-awaited IPO, it would be the first time a major social media company has entered the stock market since Pinterest debuted in 2019.
Reddit, which secretly filed for an IPO in December 2021, plans to file for public disclosure in late February, begin a roadshow in early March, and complete the IPO by the end of March, two people familiar with the matter said. Told.
The San Francisco-based company was valued at about $10 billion in a 2021 funding round and aims to sell about 10% of its stock in an IPO, the people added.
According to people involved, the company plans to decide what kind of IPO valuation it will aim for as the listing date approaches.
Investors looking to profit from Reddit's debut include Chinese multinational Tencent, Silicon Valley-based venture capital funds Sequoia Capital and Andreessen Horowitz, and startup accelerator Y Combinator. Includes financial services firm Fidelity Investments.
Advance Publications, the parent company of publishing giant Condé Nast, will also benefit from Reddit's initial public offering, as the New York-based media company has ownership of the social media site.
Reddit was co-founded in 2005 by prolific investor Alexis Ohanian and his University of Virginia roommates, web developers Steve Huffman and Aaron Swartz, but was quietly sold to Condé Nast the following year.
Ohanian (now best known as the husband of tennis icon Serena Williams) revealed that at the time of the deal, Condé Nast paid the social media site $10 million.
By 2011, it was spun off into an independent entity under Advance Publications, but the parent company reportedly remains the majority shareholder.
“I was 16 when I thought I could get away with something.” [months] said Ohanian, whose net worth is listed by Forbes as $70 million. CNBC Back in 2020.
Mr. Ohanian has also made seed investments in other popular Silicon Valley companies, including Instacart, human resource management company Zenefits, real estate company Opendoor, and self-driving car company Cruise.
Since then, Reddit has become best known for its niche discussion groups and the ability for users to vote up or down on content posted by other members.
The company generates revenue primarily through advertising.
In April, Reddit introduced a $5.99 monthly subscription price that gives users access to premium content, but the initiative has not yet turned a profit, Huffman said in a Reddit post.
It also sought to raise more money by charging companies for access to application programming interfaces (APIs) used by technology companies to train large language models used in artificial intelligence.
The move upset some users who rely on third-party apps to access Reddit, with nearly 8,000 subreddits' forms going dark for 48 hours in protest of the new pricing policy.
At the time, Reddit's moderators, who work as unpaid volunteers and do tasks such as setting community rules and maintaining thread topics, asked Reddit administrators how much they relied on mods to run the site. He said that he would like to make people aware of what they are doing, and that he intends to do so in the future. It attracts users' attention by negatively impacting site traffic.
Until now, the company has refrained from pulling the trigger on an IPO until it is close to turning a profit. The outbreak of market instability that has shut down his IPO market for much of the past two years also played a role in delaying plans.
But Reddit expects to generate just over $800 million in ad revenue in 2023, up more than 20% year over year, The Information reported last month.
People familiar with IPO discussions warned that Reddit's debut plans could be delayed as has happened in the past, asking not to be identified discussing confidential deliberations.
Reddit has blamed its losses so far on its investment in the platform and the fact that users are less engaged with advertising on its site than on other social media platforms.
It has also become popular for driving the rise of dozens of “meme stocks.”
Perhaps the most infamous so-called meme stock is GameStop. The film, which was the subject of the recently released film Dumb Money, details how the video game retailer's rumors in Reddit's r/WallStreetBets discussion thread helped the video game retailer grow. has been done. It is one of the most severely short-sold American companies.
AMC Entertainment's stock price also soared on the back of a meme stock rally fueled by the same forum on Reddit. There, users shared countless posts supporting the movie theater chain as its stock price ended above 100% in mid-2021.
A representative for Reddit declined The Post's request for comment.
with post wire
