• Reddit’s March IPO, first for a major social media company since Pinterest.
• Valued at $10B, Reddit aims to sell 10% of shares, user support crucial.
• IPO filing late February, completion by March-end.

In a move that has been long-awaited by the investment community, social media giant Reddit is reportedly gearing up for its initial public offering (IPO) in March. Sources familiar with the matter have indicated that detailed plans have been drawn up for the IPO, marking a significant milestone for the platform that has been eyeing a public listing for more than three years.

If the plans proceed as anticipated, Reddit’s IPO would be the first of a major social media company since Pinterest’s listing. The company is entering the public market at a time when social media platforms face intense competition for advertising dollars from the likes of TikTok and Meta (formerly Facebook).

Investor sentiment on the Reddit platform itself is expected to play a unique role in this IPO. The platform, known for its diverse user base and influential community, has been a hotspot for “meme” stock rallies, including those of GameStop and AMC Entertainment Holdings. The willingness of Reddit users to support the company’s stock market debut will likely be closely observed.

Reddit filed confidentially for its IPO in December 2021 and is planning to make its public filing in late February. The roadshow is expected to kick off in early March, with the IPO completion targeted by the end of March. The company, based in San Francisco and valued at around $10 billion in a funding round in 2021, aims to sell about 10% of its shares in the IPO. The final decision on the IPO valuation will be made closer to the listing date.

However, sources caution that these plans could be subject to change, as has happened in the past, and they emphasize that the information is based on confidential deliberations.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit gained prominence for its unique discussion groups and user-driven content ranking system. The company generates revenue primarily through advertising and offers a premium subscription service at $5.99 per month. Despite its popularity, Reddit has yet to turn a profit, citing investments in the platform and lower user engagement with advertising compared to other social media platforms.

The decision to go public was reportedly delayed until the company was closer to profitability, and market volatility over the past two years also contributed to the delay. Reddit expects to generate over $800 million in advertising revenue in 2023, representing a more than 20% increase from the previous year.

Investors are keeping a close eye on Reddit’s IPO as it joins the ranks of other social media stocks that have rebounded in the past year. The overall rally in technology stocks has contributed to the remarkable performance of companies like Meta Platforms (formerly Facebook) and Snap.

Also Read

Intel Secures Momentum in EU Antitrust Battle

Intel's EU antitrust battle advances: Regulator's analysis faulted. Intel's rebate case: $1.2...