Reddit reportedly planning to launch IPO in March

The planned IPO also poses a test for Reddit users to demonstrate their loyalty to the platform.

Reddit, the famous social media platform, is about to launch an initial public offering (IPO) after three years of contemplation and is expected to enter the stock market in March. The company secretly filed for an IPO in December 2021 and hopes to go public in February 2024, according to a Reuters report on Thursday, citing people familiar with the matter.

Reddit to sell 10% stake to investors

The IPO process is expected to begin with a roadshow in early March and is expected to conclude when the IPO actually closes in the same month.

The San Francisco-based company plans to offer about 10 percent of its shares during the IPO, with the exact valuation to be determined closer to the IPO date.In 2021, the social media platform was valued at about $10 billion in a funding round led by Fidelity Management with participation from other venture capital firms.Whatsminer Miner

Last year, the company unveiled plans for its advertising revenue to exceed $800 million, suggesting it expects to increase its potential valuation during the IPO.

Reddit’s upcoming IPO is expected to be the first major social media company to go public since the launch of Pinterest in 2019. The move would put the social media platform in direct competition with Pinterest.

Both platforms originated in the U.S. and share a common goal of navigating the competitive space of online interaction and content sharing to generate profits.

Reuters says despite the company’s thorough planning, the timetable for an initial public offering could be delayed for undisclosed reasons.

Loyalty test

The planned IPO also presents a test for Reddit users to demonstrate their loyalty to the platform. According to Reuters, investors involved in the social media platform have contributed significantly to the past “meme” stock surges of some major companies, including GameStop and AMC Entertainment Holdings.

Insiders believe this unique feature adds an element of unpredictability to Reddit’s upcoming IPO debut, setting it apart from its predecessor, Pinterest.

The sector rallied on the back of a broader rally in social media stocks, with gains in tech stocks delivering significant gains.

Shares of Meta Platforms, Facebook’s parent company, have tripled in the last 12 months, while Snap’s stock has risen 60 percent in the same period. Reddit was founded in 2005 by Steve Huffman and Alexis Ohanian. Since then, the company has become popular with users for its niche discussion groups and user-driven content management. Bitmain Miner

When the social media platform announced that it would charge companies for access to its application programming interface (API), it was met with strong opposition, affecting users who relied on third-party applications to access Reddit.

In June 2023, the company’s CEO said that the company, which offers premium access to its platform for a subscription fee of $5.99 per month, has yet to turn a profit in more than a decade.

Historically, the company’s financial setbacks have been linked to investments in the platform and the low level of user interaction with advertisements on its site compared to other social media platforms.