Is Reddit Finally Launching Its IPO?

Popular social media platform Reddit is getting ready to launch its initial public offering (IPO) in March 2024 as per a recent Reuters report.

• Beginning late February, Reddit will complete the IPO by the end of March.
• Nearly 10% of the company’s shares will go public through the offering.

The San Francisco-based company filed confidentially for an IPO in December 2021 and expected to get listed in the next few months. But the company refrained from it due to a volatile equity market throughout 2022- 23.

It was valued at $10 billion during a funding round in 2021. The valuation at which it will go ahead with the IPO will be decided at the time of public listing.

Ever popular and controversial, the social media company was founded in 2005 by Steve Huffman, Alexis Ohanian and Aaron Swartz. Swartz is no more.

The company generates its revenue through advertisements and premium membership to its users also known as Redditors. With premium membership, a user’s experience on Reddit becomes ad-free.

However, the company has never turned a profit as per a June 2023 report by Intelligencer.

The company has refrained from going as ad-heavy as other social platforms such as Facebook, Instagram or Twitter as it caters to a comparatively niche audience. Its attempt to introduce charges for access to its application programming interface (API) met heavy resistance from the users.

Performance-wise, 2023 was a remarkable year for social media stocks. Several of them clocked in double-digit percentage profits.

• Meta Platforms (META) stock price surged nearly 2.5x last year. In fact, the company was a part of “Magnificent Seven”—the best-performing tech stocks driven by AI Boom.

• Snap Inc. (SNAP) stock price surged more than 65% last year.

• Pinterest (PINS) stock price rose 30% last year.

With rather limited means, Reddit is trying to mark a similar fate on the charts.