Reddit is on the cusp of its highly-anticipated stock market debut, which is expected to be the largest IPO by a major social network in four years. The company’s financial performance was revealed in a filing with the Securities and Exchange Commission on Thursday, which also disclosed that OpenAI founder and CEO Sam Altman holds an 8.7% stake in the social media group, making him the largest shareholder.
Trading under the ticker symbol “RDDT” on the New York Stock Exchange, Reddit’s long-awaited listing (scheduled for March) is set to be the largest social media IPO since Pinterest went public in 2019.
The company has not yet determined the number of shares to be offered or the price range for the proposed offering, as stated in a statement by Reddit.
The IPO filing also revealed that Reddit experienced a loss of $90.8 million in 2023, despite a roughly 21% increase in revenue. The platform boasts 267.5 million weekly active users, over 100,000 active communities, and 1 billion total posts.
Advance Magazine Publishers holds the largest stake in the company at 30.1%, while Chinese multinational Tencent owns 11%.
The planned IPO comes nearly 20 years after Reddit’s launch and will be a significant event for the platform, which still lags behind other social media giants such as Facebook and Twitter. The filing also outlined Reddit’s unique plan to allow its most active users to buy stock at the IPO. Additionally, Reddit plans to reward certain users with shares through a tiered system based on their contributions to the platform.
Reddit was valued at $10 billion in a 2021 funding round, and it is anticipated that the company will aim for a similar valuation with its upcoming stock sale. It’s expected to ask to sell nearly 10% of its stock, as reported by Reuters.
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Reddit also cited data licensing agreements as a source of revenue in its filing, disclosing a recent deal with Google worth $203 million. This deal, announced on Wednesday, will allow Reddit’s content to be used to train Google’s artificial intelligence (AI) models, generating approximately $60 million annually, as reported by Reuters.
The filing outlined Reddit’s belief that its growing platform data will become a key element in training large-scale language models and will also serve as an additional monetization channel for the company.
Reddit initially filed for an IPO in 2021 but postponed its public offering due to challenging economic conditions and poor performance among listed technology stocks. Morgan Stanley and Goldman Sachs have been named lead underwriters for the IPO, along with more than a dozen other banks.
Source: www.theguardian.com
