Reddit Files Confidential IPO
Reddit Aims to Sell Shares to the Public
Reddit, the message board operator which has been around since 2005 but gained widespread popularity during the meme stock craze of early 2021, is gearing up to go public via an IPO. The company confidentially filed with the Securities and Exchange Commission to sell shares to the public.
Reddit has not determined how many shares it will sell and the price range. The company expects the IPO to take place once the SEC reviews Reddit’s documents. An IPO is also subject to market conditions. Reddit was valued at around $10 billion in August after Fidelity Investments invested over $400 million. Reddit sported a valuation of $6.5 billion prior to that cash infusion.
Timing Is Everything
Throughout the year there has been a rush of companies to debut on the stock market. Over 900 companies have IPOed so far in 2021, raising close to $300 billion. Fundraising runs the gambit from dating app Bumble (BMBL) to electric truck maker Rivian Automotive (RIVN).
Reddit is hoping to capitalize on the interest the message board operator has gained since shares of GameStop (GME) and AMC (AMC) took off thanks to the r/WallStreetBets forum. Reddit added millions of new users thanks to this specific community’s growth. This growth has helped Reddit bring on new advertisers, which is a good sign since most of Reddit’s revenue comes from ad sales.
Reddit Still Not Profitable
Reddit launched 16 years ago, making a name for itself by running message boards about a variety of topics. It eventually morphed into a popular online destination for groups to gather and share news and views.
The company had 50 million daily users as of January, and in August ad revenue hit $100 million for the quarter, setting a record. The company counts big-name investors as backers including Andreessen Horowitz and Sequoia Capital. Profitability, however, has eluded the company.
The meme stock craze has made Reddit into a must-visit destination for retail investors. Reddit is hoping those investors will participate in its IPO.
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