Heaptalk, Jakarta — Social media platform Reddit is set to hold Initial Public Offering in March this year. This company aims to sell approximately 10% of its shares in the IPO and will also decide on the IPO valuation target closer to the listing time.
As cited in Reuters, this plan is a follow-up move initiated over three years ago and claimed to be the first IPO of a large social media company since Pinterest go public in 2019. This IPO plan comes amid competition from Reddit and other social media platforms to get advertising from large platforms such as Facebook and TikTok.
As is known, Reddit confidentially submitted the registration statement draft with the Securities and Exchange Commission to go public in December 2021, yet the plans were never realized. This effort occurred several months after the company obtained US$410 million in a Series F round from Fidelity. Concurrently, Reddit intends to close out the round at US$700 million. In January 2022, this social media platform also claimed to be working with Morgan Stanley and Goldman Sachs to go public and was considering a valuation of as much as US$15 billion.
Established in 2005, In 2023, Reddit gained recognition for its specialized discussion groups and user-driven content ranking system. Reddit relies on the advertising business for revenue but has yet to profit. As Reddit’s co-Founder and CEO said, these losses are due to the platform’s ongoing investment and lower user engagement with ads compared to other social media platforms. The Information reported a few weeks ago that Reddit expected to complete the year with more than 20% advertising revenue, attaining US$800 million but not enough to break even.
For this reason, as Reddit prepares for its IPO, the company expects to raise funds by selling shares and notices a significant moment in its enhancement. The market is also expected to closely watch its trajectory in the competitive landscape of social media stocks.
