Social media site Reddit filed for a hotly anticipated IPO on the New York Stock Exchange yesterday with plans for an unusual offering to allow its users to buy into the stock on debut.
In an IPO filing to US regulators, the social media site also revealed its losses had narrowed to $90.8m (£72m) while revenues had swelled 21 per cent to $804m (£634m) in 2023.
The float is set to be a major test for the platform which has lagged behind the commercial success of rivals like Facebook and Twitter.
In its filing, Reddit said the IPO would allow its users to buy into the stock on its debut to extend their “sense of ownership” into the firm.
“We want this sense of ownership to be reflected in real ownership—for our users to be our owners. Becoming a public company makes this possible,” the firm’s chief and co-founder Steve Huffman wrote in its filing. “With this in mind, we are excited to invite the users and moderators who have contributed to Reddit to buy shares in our IPO, alongside our investors.”
Reddit said it had an average of 73.1m daily active users and 267.5m weekly active users in the three months to the end of last year, with over 100,000 active communities on its platform and 1bn cumulative posts.
Founded 18 years ago, Reddit was valued at $10bn (£7.9bn) in a funding round in 2021 but it is unclear what valuation the company will aim for during its share sale in the coming weeks. It is expected to seek a sale of nearly 10 per cent of its shares in the IPO, Reuters previously reported.
The filing revealed that chief Steven Huffman holds Class B common stock that is issuable upon achieving a vesting condition that Reddit attains a $5bn (£4bn) market capitalization valuation after the offering. The firm is expected to ease past that price tag on its debut.