Reddit’s IPO Details Unveiled

Reddit Inc. has revealed intricate details about its upcoming initial public offering (IPO), aiming to raise a hefty $748 million. In a mundane filing on Monday, the social media giant disclosed plans to offer 22 million shares, priced between $31 and $34 each. The bulk of these shares, approximately 15.3 million, will be sold by Reddit itself, while the remaining will come from existing shareholders, primarily Reddit employees.

If the IPO hits the upper limit, Reddit could command a market value of $5.4 billion, based on an anticipated 158.98 million shares in circulation. Factoring in employee stock options and restricted share units, the valuation could swell to approximately $6.4 billion.

Reddit is reserving about 8% of the IPO shares for select groups, including users who joined the platform before Jan. 1, moderators, board members, and associates of employees and directors. Notably, these shares won’t be subjected to a lockup period, allowing owners to trade them on the debut trading day.

The IPO is spearheaded by financial heavyweights such as Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp., with Reddit eyeing a listing on the New York Stock Exchange under the ticker symbol RDDT.

Reddit’s journey to this IPO milestone has been a lengthy one, reflecting the fluctuating tides of the market. From its confidential filing in 2021 to the present, Reddit’s valuation has oscillated, initially pegged at $10 billion, with subsequent estimations ranging up to $15 billion.

With a net loss of $91 million on revenue of $804 million in 2023, Reddit is not yet profitable. However, it boasts a substantial user base, with an average of 73.1 million daily active unique visitors in the fourth quarter of last year.

Despite Reddit’s popularity, uncertainties loom, particularly concerning its notoriously vocal user base and its potential impact on the company’s performance. Nevertheless, Reddit’s CEO, Steve Huffman, remains optimistic about the platform’s growth prospects, emphasizing its evolving advertising business and ventures into AI licensing.

As Reddit gears up for its IPO, all eyes are on its performance and the implications it may hold for other prospective public offerings in the tech sphere.