Reddit, the popular social media platform, is reportedly preparing to go public with an initial public offering (IPO) in March, marking its official entry into the stock market. Sources privy to the matter claim that Reddit has been eyeing an IPO for over three years and is planning to launch its filing in late February, commencing a roadshow in early March, with the IPO completing by the end of the same month.
The planned IPO by Reddit is seen as an opportunity to raise funds for the company’s expansion and to compete with its competitors for a larger advertising market share. The likes of TikTok and Facebook have been chomping at Reddit’s heels in a bid to win over advertisers’ favor. This will be the first major social media IPO since Pinterest’s debut in 2019, signaling the potential for an exciting 2022 IPO market.
Reddit has been valued at about $10 billion since its last funding round. In the upcoming IPO, the company plans to sell approximately 10% of its shares, though the valuation of the IPO will be determined by market demand. The offering is expected to test the willingness of enthusiastic Reddit users who have helped to fuel dozens of “meme” stock rallies over the past three years, from GameStop and AMC to other companies. The users of the platform who enjoy participating in such events may also be interested in investing in Reddit.
However, there are no guarantees that the plans for Reddit’s IPO will go as scheduled, and it may encounter delays. Challenges such as regulatory requirements, market conditions, and other variables may cause the financial goals to be modified, postponed or abandoned. Nonetheless, if the IPO proceeds as planned, it will offer an unprecedented opportunity for Reddit to raise funds for future growth initiatives and to expand its advertising offerings.
According to organization insiders, Reddit management recognizes the importance of being able to compete with other major platforms in the advertising market. Therefore, access to additional funds would allow it to expand its ad offerings and reach new audiences. The social media company has been pursuing multiple revenue streams and partnerships, including notable deals with Snapchat, which give it access to new audiences and ways to monetize its content.
