Reddit seeking a valuation of up to $6.5 billion in IPO

Reddit
is
seeking
a
valuation
of
up
to
$6.5
billion
in
its
upcoming
IPO,
according
to
a
person
familiar
with
the
matter.

The
company
plans
to
price
its
IPO
between
$31
to
$34
a
share,
the
person
said.
The
Wall
Street
Journal
was
first
to
report
on
the
expected
range
and
valuation.

Reddit

filed
to
go
public
in
February
and
plans
to
trade
on
the
New
York
Stock
Exchange
under
ticker
symbol
RDDT.

Employees
will
be
allowed
to
sell
Reddit
stock
during
the
offering,
the
source
added.
Reddit
had
a
private
market
valuation
of
$10
billion
when
it
last
raised
a
funding
round
of
$1.3
billion
in
2021,
according
to
PitchBook.

At
the
top
of
the
range,
Sam
Altman’s

shares
in
the
company
would
be
worth
over
$400
million.
The
OpenAI
CEO
led
a
$50
million
funding
round
into
Reddit
in
2014,
and
said
in
a blog
post at
the
time
that
he’d
been
daily
Reddit
user
for
9
years
and
that
the
company
was
“an
example
of
something
that
started
out
looking
like
a
silly
toy
for
wasting
time
and
has
become
something
very
interesting.”
Altman
was
on
Reddit’s
board
from
2015
until
2022.

Other
notable
shareholders
include


Tencent
and
Advance
Magazine
Publishers,
the
parent
company
of
publishing
giant
Condé
Nast.
A
year
after
tech
entrepreneurs
Alexis
Ohanian
and
Steve
Huffman
founded
Reddit,
Condé
Nast
bought
the
company,
before
spinning
it
out
in
2011.

In
2021,
Reddit

filed
a
confidential
draft
of
its
public
offering
prospectus
with
the
Securities
and
Exchange
Commission.

The
company
brought
in
$804
million
in
annual
revenue
for
2023,
representing
a
20%
year-over-year
increase
from
$666.7
million,
according
to
its
latest

IPO
prospectus.
Its
net
loss
narrowed
to
$90.8
million
for
2023
from
$158.6
million
the
year
prior.

Reddit’s
non-employed
forum
moderators,
known
as
Redditors,
can
participate
in
the
upcoming
IPO
through
the
company’s
“directed
share
program,”
the
filing
said.
Similar
programs
allowing
community
members
or
customers
an
opportunity
to
buy
in
at
the
IPO
price
were
offered
by
Airbnb,
Doximity
and
Rivian.

Last
summer,
several
notable
Reddit

moderators
locked
their
communities,
or
subreddits,
over
a
disagreement
with
the
company’s
plans
related
to
its
application
programming
interface,
or
API,
used
by
third-party
developers
to
build
apps
on
the
platform.
The
change
would
have
forced
some
third-party
developers
to
pay
more
to
access
Reddit’s
API,
depending
on
their
usage.

Reddit
said
the
API-pricing
changes
were
needed
as
the
company’s
data
was
being
used
by
tech
companies
training
large
language
models
akin
to
OpenAI’s
GPT-family
of
software.

The
company
is
now
developing
a
data-licensing
model
to
accompany
its
core
online
advertising
business,
according
to
the
filing.
Google

recently
announced
that
it
has
an
expanded
partnership
with
Reddit,
allowing
it
access
to
the
Reddit’s
data.

Reddit’s
Wall
Street
debut
comes
during
a
historically

slow
stretch
for
IPO,
due
in
part
to
interest
rate
concerns
and
global
economic
uncertainty.
Reddit’s
IPO
will
represent
the
first
major
tech
offering
of
the
year
and
the
first
social
media
IPO
since


Pinterest’s
Wall
Street
debut
in
2019.

John
Tuttle,
the
vice-chair
of
the
New
York
Stock
Exchange,
said
in
an

interview
in
January
that
the
IPO
market
should
improve
in
2024,
stating
at
the
time,
“We
have
a
robust
pipeline
from
across
sectors
and
geographies.”

WATCH:

Reddit
going
public
will
“force
their
hand”
to
learn
to
be
profitable