Social media giant Reddit is set to launch its highly anticipated initial public offering (IPO) in March, marking a significant event in the sector, with the IPO being the first major debut since Pinterest in 2019. Valued at around $10 billion in a 2021 funding round, the company faces formidable competition from platforms like TikTok and Facebook in the battle for advertising revenue. The IPO is expected to serve as a litmus test for it, gauging its users' willingness to support the company's entry into the stock market, especially given the platform's history of driving "meme" stock rallies.
Based in San Francisco, Reddit, founded in 2005, plans to file publicly in late February, commence its roadshow in early March, and complete the IPO by the end of the same month. The company aims to sell approximately 10% of its shares, with the IPO valuation yet to be determined closer to the listing. Despite Reddit's popularity, known for its niche discussion groups, the platform has yet to turn a profit, primarily relying on advertising revenue and premium access fees. CEO Steve Huffman acknowledged losses, attributing them to investments and lower user engagement with advertising. The company's move towards an IPO comes after the platform expected to generate over $800 million in advertising revenue in 2023, reflecting a 20% increase from the previous year.
