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Reddit, a popular social media platform mainly linked to the meme stock frenzy, will be going public. On Wednesday, the firm confirmed that it had filed a confidential application for an initial public offering with the US Securities and Exchange Commission (SEC).
This is not unexpected because, in September, it was reported that the platform wanted to unveil an IPO when it reached a valuation of more than $15 billion.
Reddit files for an IPO
Reddit has enjoyed immense gains this year, and amidst the meme coin frenzy, the firm’s valuation has doubled on an annual basis. During a fundraiser in August, the social media firm was given a valuation of $10 billion.
Despite the gains, the company’s valuation does not come close to Twitter and Meta, whose valuations are almost touching the $1 trillion mark. Reddit was launched at almost the same time as Twitter and Meta’s Facebook.
In its draft registration statement with the SEC, the platform has not revealed the number of shares offered during the IPO or the price at which the shares will be floated.
Reddit users are popular with pumping stocks, and news of this IPO has also created similar conversations. A Reddit threat has joked about pumping the stock prices as soon as it is available, with some users already agreeing to the move.
Earlier this year, Reddit users were engaged in a trading battle between small-scale traders and Wall Street firms. The community helped pump the prices of shorted shares of AMC and GameStop, which gave rise to the meme stock frenzy.
Reddit’s growth record
Reddit was founded in 2005 in San Francisco by Steve Huffman and Alexis Ohanian. During the second quarter of 2021, the firm’s advertising revenues came in at $100 million, three times more than what was reported in Q2 2020.
The number of daily active users on Reddit stands at more than 52 million and more than 100,000 communities. This is significantly lower than Facebook, with almost 2 billion daily active users.
Following this growth, Reddit has attracted the partnerships of notable investors that include the Andreessen Horowitz venture capital firm, Sequoia Capital and Tencent Holdings. Hip hop star, Snoop Dogg, is also one of the firm’s investors.
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