Reddit plans to raise up to $748 million as part of its impending IPO, with a valuation of around $6.5 billion.
According to a corporate document issued on Monday, the company intends to sell around 22 million shares at prices ranging from $31 to $34 per share.
Reddit has also reserved around 1.76 million shares for specific users and moderators, known as Redditors, who want to participate in the IPO and created their user accounts before January 1. These Redditors will be allowed to buy those shares and then sell them when Reddit goes public because they will be exempt from a lock-up period, which generally restricts investors from selling shares for six months following the IPO.
The firm warned in its S-1 filing that Redditor participation in its IPO “could result in increased volatility in the market price” of the company’s Class A common stock. Other firms that have gone public and allowed community members and others to participate in their IPOs through similar directed-share programs include Doximity, Rivian, and Airbnb.
Reddit filed its IPO prospectus in February, stating that it intends to list on the New York Stock Exchange and trade under the ticker code “RDDT.”
Investors are keeping a tight eye on Reddit’s planned IPO, which will be this year’s first significant internet stock offering and the first social network IPO since Pinterest went public in 2019.
In 2021, Reddit submitted a secret draft of its public offering prospectus to the Securities and Exchange Commission. According to the deal-tracking firm PitchBook, Reddit raised $1.3 billion in fundraising that year and had a private market worth of $10 billion.
Reddit’s yearly sales in 2023 were $804 million, up 20% year on year from $666.7 million, according to the company’s S-1 filing. It also reported a net loss of $90.8 million in 2023, which was less than the $158.6 million loss it incurred in 2022.
Some of the firm’s significant shareholders include Tencent, Condé Nast’s parent company Advance Magazine Publishers, and OpenAI CEO Sam Altman, who served on Reddit’s board of directors from 2015 to 2022.
