Social media company Reddit has outlined specific plans to begin its initial public offering (IPO) in March, pursuing a listing it has been considering for almost three years, according to a Reuters report quoting information from persons familiar with the subject.
It would be the first major social media business to go public since Pinterest opens new tab in 2019, and it would occur at a time when Reddit and its competitors are up against fierce competition from Facebook and TikTok for advertising cash.
The offering would also gauge how many Reddit users would be willing to support the company's initial public offering.
Over the past three years, numerous investors have contributed to numerous "meme" stock rallies on the site. Examples include game retailer GameStop and movie operator AMC Entertainment Holdings.
According to two of the sources, Reddit, which registered in secret for its IPO in December 2021, intends to file publicly in late February, start its roadshow in early March, and finish the IPO by the end of the month.
According to the sources, the San Francisco-based business, which was estimated to be worth $10 billion at a capital round in 2021, plans to sell roughly 10% of its shares during the IPO. When the listing date approaches, it will choose the IPO valuation it will pursue, according to the report.
The individuals, who requested anonymity in order to share private discussions, warned that Reddit's IPO plans might be postponed, as has happened in the past.
There were no comments from Reddit on the issue.
Reddit, which was founded in 2005 by web developer Steve Huffman and businessman Alexis Ohanian, gained popularity for its specialised discussion groups and its users' ability to "up" or "down" content posted by other users.
Huffman stated in a June Reddit post that the business, which mostly makes money from advertising and also charges $5.99 a month for VIP access, has not yet turned a profit.
The company has previously blamed its losses on platform investments and consumers' lower engagement with advertising on the platform compared to other social media.
The business decided to wait until it was closer to profitability before launching its first public offering. Its intentions were also delayed by bouts of market volatility that closed the IPO market for a significant portion of the previous two years.
According to a forecast published by The Information last month, Reddit is predicted to earn slightly over $800 million in advertising revenue in 2023—an increase of over 20% from the previous year.
Technology companies utilise Reddit's application programming interface (API) to train large-language models used in artificial intelligence. Reddit said last year that it will charge businesses for access to its API.
Some users who browse Reddit through third-party apps were offended by the change.
Over the previous year, large social media stocks have recovered, mostly due to a rally in technology equities around the time that interest rates peaked. Over the last year, the value of Meta Platforms' (the company that runs Facebook) shares has more than tripled, while Snap's (opens new tab) shares have increased by 60%.
(Source:www.reuters.com)
It would be the first major social media business to go public since Pinterest opens new tab in 2019, and it would occur at a time when Reddit and its competitors are up against fierce competition from Facebook and TikTok for advertising cash.
The offering would also gauge how many Reddit users would be willing to support the company's initial public offering.
Over the past three years, numerous investors have contributed to numerous "meme" stock rallies on the site. Examples include game retailer GameStop and movie operator AMC Entertainment Holdings.
According to two of the sources, Reddit, which registered in secret for its IPO in December 2021, intends to file publicly in late February, start its roadshow in early March, and finish the IPO by the end of the month.
According to the sources, the San Francisco-based business, which was estimated to be worth $10 billion at a capital round in 2021, plans to sell roughly 10% of its shares during the IPO. When the listing date approaches, it will choose the IPO valuation it will pursue, according to the report.
The individuals, who requested anonymity in order to share private discussions, warned that Reddit's IPO plans might be postponed, as has happened in the past.
There were no comments from Reddit on the issue.
Reddit, which was founded in 2005 by web developer Steve Huffman and businessman Alexis Ohanian, gained popularity for its specialised discussion groups and its users' ability to "up" or "down" content posted by other users.
Huffman stated in a June Reddit post that the business, which mostly makes money from advertising and also charges $5.99 a month for VIP access, has not yet turned a profit.
The company has previously blamed its losses on platform investments and consumers' lower engagement with advertising on the platform compared to other social media.
The business decided to wait until it was closer to profitability before launching its first public offering. Its intentions were also delayed by bouts of market volatility that closed the IPO market for a significant portion of the previous two years.
According to a forecast published by The Information last month, Reddit is predicted to earn slightly over $800 million in advertising revenue in 2023—an increase of over 20% from the previous year.
Technology companies utilise Reddit's application programming interface (API) to train large-language models used in artificial intelligence. Reddit said last year that it will charge businesses for access to its API.
Some users who browse Reddit through third-party apps were offended by the change.
Over the previous year, large social media stocks have recovered, mostly due to a rally in technology equities around the time that interest rates peaked. Over the last year, the value of Meta Platforms' (the company that runs Facebook) shares has more than tripled, while Snap's (opens new tab) shares have increased by 60%.
(Source:www.reuters.com)
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