The owners of Reddit, the popular discussion forum website, aim to raise $748 million (€684 million) in what would be one of the largest public offerings (IPO) of shares so far this year. The promoters of the social media platform want to list titles at a price between $31 and $34.
The company is seeking a valuation of up to $6.5 billion. The company would be reserving around 1.76 million shares in the IPO to be purchased by users and moderators who created accounts before January 1. These shares will not be subject to a lock-up period, meaning owners can sell them on the opening day of trading, according to Reddit's February filing with the U.S. Securities and Exchange Commission.
Reddit has been working on this project to go public for more than two years. The first presentations began in 2021, when IPOs on the United States Stock Exchanges reached an all-time record of $339 billion.
Reddit raised funds that year that valued it at $10 billion and there was talk that it could reach $15 billion in an IPO. However, inflation and the subsequent increases in interest rates turned the stock markets upside down. Share issues sank and by 2022 there was talk that Reddit would only be worth 5 billion
Founded in 2005, Reddit had an average of 73.1 million active daily unique visitors in the fourth quarter of 2023, according to its February report. The company recorded losses in 2023 worth 91 million, compared to 159 million in the red the previous year. As for income, they were 804 million euros.
Reddit's largest shareholder is Advance Magazine Publishers, part of the publishing empire of the Newhouse family, owner of Conde Nast. This publishing group bought Reddit in 2006 and spun it off in 2011. Reddit believes that its millions of loyal users and moderators pose both advantages and disadvantages for the company.
Reddit users have had a turbulent relationship with the owners of the website. In fact, they have launched several revolts, from Reddit's position on racism to personnel decisions.
Meme Actions
Thousands of members of one of Reddit's forums, WallStreetBets – which has 15 million users and helped popularize meme stocks like GameStop – voted in favor of selling Reddit shares when it goes public. Their reasons ranged from the company's lack of profitability to competitive concerns.
The company plans to list its shares on the New York Stock Exchange under the symbol RDDT. Reddit co-founder and CEO Steven Huffman said in a signed letter included in the filing that the company has many opportunities to grow both the platform and the business. “Advertising is our first business, and advertisers of all sizes have found Reddit to be a great place to find interesting customers who aren't easy to reach through other means,” Huffman said.
Reddit said it is in the early stages of allowing third parties to license access to the platform's data, including to train artificial intelligence models. The company said it signed data licensing agreements worth $203 million and terms of two to three years in January. The company expects to earn at least $66.4 million in revenue from those deals this year, according to the filing.
Follow all the information Five days in Facebook, X y Linkedinor nuestra newsletter Five Day Agenda
The Five Day Agenda
The most important economic quotes of the day, with the keys and context to understand their scope
receive it
To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS
_