Reddit has announced plans for its eagerly awaited IPO, eyeing a valuation that could reach $6.4 billion. The social media giant is offering approximately 22 million shares, with individual prices ranging from $31 to $34, potentially raising as much as $748 million.
This IPO is set to be a significant gauge of the market’s reception to new entrants, marking a milestone for Reddit, which has been laying the groundwork for going public for over two years. Despite a shaky start to the year for IPOs, Reddit’s move could signal a resurgence.
The platform, a hub for vibrant online communities, gained notoriety during the “meme-stock” phenomenon of 2021, where users on the “wallstreetbets” subreddit orchestrated a buying frenzy in stocks like GameStop, shaking up the investment world. This event not only challenged hedge funds but also cemented retail investors’ influence on the market.
In a nod to its user base, Reddit is reserving 8% of its shares for its community members, including users, moderators, and associates, with no lock-up period, introducing the possibility of heightened trading volatility on the first day.
As the platform prepares to go public, it faces increased scrutiny over content moderation—a critical issue for both advertisers and regulators. Reddit’s reliance on volunteer moderators has been a contentious point, especially when several stepped back in 2023 over policy disagreements.
With major financial institutions like Morgan Stanley and Goldman Sachs leading the underwriting, Reddit is set to list on the New York Stock Exchange under the ticker “RDDT.” Despite its popularity, the company has yet to turn a profit, a fact that investors will be watching closely as it transitions into a publicly traded entity.
