General info on Reddit
About the company
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NameReddit
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IndustrySocial Media/Advertising
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Employees2,013
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Founding year2005
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TickerRDDT
Filing Information
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IPO file dateFeb. 22nd, 2024
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No. of shares1.3 million shares
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Priceest. at $31-$34
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ExchangeNYSE
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BookrunnersMorgan Stanley, Goldman Sachs, J.P. Morgan
IPO Details
Overview of Reddit
Reddit, a prominent American social platform driven by its users, serves as a hub for news and discussions, creating excitement ahead of its upcoming IPO. Ranked as the 18th most visited site globally, this milestone could pave the way for Reddit to mirror the success of social media behemoth META. Notably, Reddit shot to fame when users on the r/WallStreetBets subreddit orchestrated a market frenzy with meme stocks like GameStop and AMC in early 2021.
At its core, Reddit prides itself on being a platform fueled by user-generated content and community engagement, standing out as one of the remaining champions of community building and specialized forums known as sub-reddits.
When is the IPO Happening?
Reddit filed on February 22nd, 2024, but this was a long-time coming as the company had this planned since 2023. Reports speculate the debut will take place on Thursday, March 21st.
Reddit IPO Stats
Reddit primarily generates revenue from advertising, with ads accounting for 98% of its earnings in both 2022 and 2023.
- The company has experienced robust funding rounds, amounting to $1.3 billion across nine rounds, including a Series F round of $410 million on August 12, 2021.
- In 2022, Reddit reported revenues of $668 million, increasing by 21% year-over-year to $804 million in 2023.
- Reports suggest Reddit aims to price its IPO between $31 and $34 per share, valuing the company at up to $6.5 billion, although earlier estimates valued it at $10 billion.
To navigate the IPO process, Reddit has enlisted the services of Morgan Stanley, J.P. Morgan, and Goldman Sachs as its bookrunners
Exclusive Moderator Opportunity
In a unique move, Reddit is extending the opportunity for its top users to participate in its IPO early through a "directed share program," as outlined in the filing. Users on Reddit will be categorized into a six-tier system based on their karma score or moderator activity.
Users in the top tier will have the chance to purchase shares in the IPO before its public debut, serving as a token of appreciation for their loyalty and active engagement. This initiative underscores Reddit's dedication to its user base, highlighting the mutual commitment between the platform and its community.
Collaboration with Google for AI Enhancement
Open AI's CEO, Sam Altman, stands to generate substantial wealth as Reddit prepares to go public. Altman's foresight in making strategic investments in the online discussion board company since 2014 is set to potentially pay off lucratively. With a significant 9.2% voting power stake ahead of Reddit's upcoming initial public offering, Altman's financial gains are poised to reach the millions. Notably, Altman's investments in Reddit shares total at least $60 million, further solidifying his control and influence over the online messaging board company.
Major Stakeholder, Sam Altman, Invested in Reddit
With Reddit on the brink of going public, Sam Altman, the driving force behind OpenAI, could see a considerable return on his investment. His strategic early stakes in Reddit, amounting to at least $60 million, afford him considerable sway, holding 9.2% of voting power.
Key Takeaways on Reddit
- Boasting a daily user base of 73.1 million, Reddit maintains a strong online presence globally.
- Ranked 18th among the most visited websites worldwide as of October 2023.
- Investors eagerly await Reddit's IPO, anticipated to be the biggest social media debut since 2019.
- Utilizing AI as a revenue-generating strategy through Google collaboration.
- Noteworthy stakeholder involvement from Sam Altman, making this IPO a significant event for 2024.
Sources: crunchbase.com, businessofapps.com, finance.yahoo.com
Summary
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NameReddit
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IndustrySocial Media/Advertising
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Employees2,013
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Founding year2005
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TickerRDDT
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IPO file dateFeb. 22nd, 2024
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No. of shares1.3 million shares
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Priceest. at $31-$34
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ExchangeNYSE
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BookrunnersMorgan Stanley, Goldman Sachs, J.P. Morgan
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