Reddit to jump on the IPO bandwagon with confidential filing

It was reported in September that the company was hoping to hit a valuation of more than $15bn (€13.26bn) by the time it planned to list its shares

Reddit's message boards, especially its WallStreetBets thread, were at the heart of a pitched battle between small-time traders and some of the big Wall Street firms this year.

Website Reddit whose message boards became the go-to destination for day traders during this year's meme stock frenzy, said yesterday it had confidentially filed for an initial public offering with US securities regulators.

Reuters reported in September that the company was hoping to hit a valuation of more than $15bn (€13.26bn) by the time it planned to list its shares.

Reddit's message boards, especially its WallStreetBets thread, were at the heart of a pitched battle between small-time traders and some of the big Wall Street firms, helping drive big gains in highly shorted shares of companies such as GameStop and AMC while popularising the term meme stocks.

At the height of the trading frenzy in February, Reddit's value doubled to $6bn (€5.3bn) from a year earlier.

Although a decent valuation, it still pales in comparison to Twitter $35bn (€30.9bn) or Facebook owner Meta Platforms' nearly $1tr (€0.88tr) market capitalisations, despite all three companies being founded around the same time.

On Reddit thread WallStreetBets some users joked about potentially pumping the offering when it became available.

"I'm in. When do we start?" a Reddit user called 9axle said in a post. The San Francisco-based company, founded in 2005 by Steve Huffman and Alexis Ohanian, reported $100m (€88m) in advertising revenue in the second quarter, an almost three-fold jump from the same period last year.

As of January, Reddit had more than 52 million daily active users and over a 100,000 communities. In comparison, Facebook had nearly 2 billion daily active users in September, while Twitter had 211 million monetisable daily active users, a term for users who see the ads placed on their platforms.

Reddit did not disclose the number of shares to be offered or the price range of the IPO in the draft registration statement.

Reuters