Reddit, the popular social media platform dubbed the “front page of the internet,” is gearing up for its much-anticipated stock market debut, aiming for a valuation of up to $6.4bn (£5bn) in its US initial public offering (IPO).
On Monday, the company shared its intentions in a public filing with the US Securities and Exchange Commission, setting a target price range of $31 to $34 per share.
If successful, Reddit’s IPO could raise more than $500m (£390m), with a potential to reach up to $748m (£583m) if it sells around 22m shares, including those offered by existing investors. The social site will allow its users to buy into the stock on its admission to the public market.
This valuation, however, falls short of its $10bn valuation in a funding round in 2021.
Reddit has been contemplating going public for over three years, and its IPO would mark the first major public offering by a social media company since Pinterest’s Stateside float in 2019.
As part of its efforts to drum up investor support, Reddit’s executives will commence meetings with potential investors today, as they aim for a listing on the New York Stock Exchange under the ticker ‘RDDT’.
Despite its popularity and widespread usage, Reddit is yet to turn a profit. Chief executive Steve Huffman acknowledged this in a June 2023 blog post, blaming financial losses on investments aimed at platform improvements and weak user engagement with advertisements compared to other social media platforms.
In an IPO filing to US regulators last month, the social media site revealed its losses had narrowed to $90.8m (£72m) while revenues had swelled 21 per cent to $804m (£634m) in 2023.
Reddit gained significant attention among investors in 2021 when users on its platform orchestrated a massive rally in shorted stocks like GameStop and AMC.
