Reddit Inc. has disclosed details of its upcoming initial public offering (IPO), which is likely to be the largest event of a relevant nature in the current year.
The mentioned company and some existing shareholders intend to raise to $748 million. Reddit, one of the largest virtual platforms in the global social media industry, and the holders of its securities plan to sell 22 million shares in the price range from $31 to $34 each. The relevant information is contained in the official statement of the company, published on Monday, March 11. Currently, it is known that about 15.3 million shares will be sold by the social media platform. Investors will sell the rest securities. In this case, it means those investors who are employees of Reddit.
The social media platform, whose users helped create the meme stock frenzy in 2021, according to preliminary information, will have a peak market value of $5.4 billion during the IPO. This expected figure takes into account 158.98 million shares of the company outstanding. Data from the US Securities and Exchange Commission indicates that a fully diluted, including employee stock options and restricted share units, Reddit’s market valuation would be about $6.4 billion.
About 8% of the securities in the IPO will be provided to Reddit users and moderators who created accounts before January 1. Also, this share of securities will be set aside for some members of the company’s management board, friends, and relatives of several employees and directors. The mentioned shares will not be subject to lockup. This means that the owners of these securities can sell them on the opening day of trading.
According to Reddit filings, the IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Bank of America Corp. The company announced that its shares will be listed on the New York Stock Exchange under the symbol RDDT.
Reddit’s more than two-year path to an IPO is a reflection of the ups and downs of the market since the initial confidential filing in 2021, when listing on United States exchanges set a historic record of $339 billion. Since then, the volume of IPOs in the US has decreased significantly. Last year, this figure amounted to only $26 billion. In January, the media reported that Reddit was analyzing reviews of early meetings with potential investors in a public offering, which recommended considering a valuation of at least $5 billion.
The social media platform is the most notable addition to the list of new companies and those firms that will go public in 2024. Among these lists, the largest was the $1.57 billion offer from Amer Sports Inc. in January. Astera Labs Inc. at the end of last week announced its intention to raise $534 million for an IPO.
The Reddit listing will be closely watched by IPO candidates, including data protection startup Rubrik Inc. and the sphere healthcare payments company Waystar Technologies Inc. In the fourth quarter of last year, the social media platform was visited by an average of 73.1 million active unique visitors daily. In 2023, the company’s revenue amounted to $804 million. Also last year, the social media platform recorded a net loss of $91 million. In 2022, the company’s revenue was $667 million. The net loss of the social media platform for the mentioned year was about $159 million.
Reddit’s largest shareholder is Advance Magazine Publishers Inc., part of the Newhouse family publishing empire that owns Conde Nast.
Millions of loyal users and moderators are both a risk factor and a source of benefit for the social media platform. It is standard practice for Reddit to have disputes in its corporate virtual space on various issues.
As we have reported earlier, Reddit Reportedly Signs AI Content Licensing Deal.
