After reports earlier this week that Reddit is planning to allow 75,000 of its power users to buy its upcoming shares at its initial public offering (IPO) price, we now have more details about the platform’s plan to go public. That’s because yesterday the company published the prospectus for its public offering. Here’s what that prospectus does and doesn’t reveal.
What we know
- Classes of Reddit stock: The company will have three classes of common stock, each with different voting power. Class A shares entitle the holder to one vote each, Class B shares will entitle the holder to 10 votes each, and Class C shares will not confer any voting rights.
- Reddit’s stock ticker: Reddit Class A stock will trade under the stock ticker RDDT.
- The stock exchange Reddit will trade on: RDDT shares will trade on the New York Stock Exchange (NYSE).
- Reddit IPO underwriters: Morgan Stanley and Goldman Sachs will be the lead underwriters for Reddit’s IPO.
- Risks to Reddit’s business: The company published an extensive list of risk factors, largely focused on how the business could fail to successfully innovate, fail to grow its user base, lose market share to competitors, or succumb to circumstances beyond its control.
- Reddit’s user stats and revenue: More on that below.
What we don’t know
- Reddit’s IPO date: The prospectus did not announce the date of Reddit’s IPO. However, reports suggest the company will hold its initial public offering sometime in March 2024.
- The number of Reddit shares available: Reddit has also not yet revealed just how many shares it will make available during its IPO.
- Reddit stock price: Additionally, the company has not yet revealed what Reddit’s IPO price per share will be. This information is usually revealed just days before shares begin trading.
Reddit’s IPO is set to be one of the most closely watched IPOs of the year yet. It’s the first major tech company in 2024 to have an initial public offering and Wall Street will be eager to see how investors react given the lackluster appetite for IPOs in recent years.
Reddit’s IPO is also the first initial public offering of a social media company since Pinterest went public back in 2019. Interestingly, however, Reddit seems to be pitching itself to investors as not just a social media company, but a search engine company as well.
In its prospectus, Reddit notes, “The internet has given people the tools to redefine how we live. We have search engines to find content and social networks to share and follow each other. Our community of communities sets itself apart with its unique combination of characteristics and is designed to provide users with a trusted place to be authentic to themselves in sharing and discovering while maintaining their privacy.”
The prospectus also revealed some updated stats about the platform. According to the prospectus, Reddit now has over 100,000 active communities and 73 million average daily active uniques. In total, the platform has one billion cumulative posts.
While not mentioned in the prospectus, Reddit also recently entered into a deal with Google, giving the search giant access to its user-generated content, which Google will use to help train its large language model AI systems.
With this deal, Google says it “will now have efficient and structured access to fresher information, as well as enhanced signals that will help us better understand Reddit content and display, train on, and otherwise use it in the most accurate and relevant ways.” Reuters cited unnamed sources who said the deal is worth $60 million per year.
Reddit also revealed it had $804 million in revenue in 2023. That was a 21% increase over the $666.7 million in revenue the company generated in 2022.
After reports earlier this week that Reddit is planning to allow 75,000 of its power users to buy its upcoming shares at its initial public offering (IPO) price, we now have more details about the platform’s plan to go public. That’s because yesterday the company published the prospectus for its public offering. Here’s what that prospectus does and doesn’t reveal.
What we know
- Classes of Reddit stock: The company will have three classes of common stock, each with different voting power. Class A shares entitle the holder to one vote each, Class B shares will entitle the holder to 10 votes each, and Class C shares will not confer any voting rights.
- Reddit’s stock ticker: Reddit Class A stock will trade under the stock ticker RDDT.
- The stock exchange Reddit will trade on: RDDT shares will trade on the New York Stock Exchange (NYSE).
- Reddit IPO underwriters: Morgan Stanley and Goldman Sachs will be the lead underwriters for Reddit’s IPO.
- Risks to Reddit’s business: The company published an extensive list of risk factors, largely focused on how the business could fail to successfully innovate, fail to grow its user base, lose market share to competitors, or succumb to circumstances beyond its control.
- Reddit’s user stats and revenue: More on that below.
What we don’t know
- Reddit’s IPO date: The prospectus did not announce the date of Reddit’s IPO. However, reports suggest the company will hold its initial public offering sometime in March 2024.
- The number of Reddit shares available: Reddit has also not yet revealed just how many shares it will make available during its IPO.
- Reddit stock price: Additionally, the company has not yet revealed what Reddit’s IPO price per share will be. This information is usually revealed just days before shares begin trading.
Reddit’s IPO is set to be one of the most closely watched IPOs of the year yet. It’s the first major tech company in 2024 to have an initial public offering and Wall Street will be eager to see how investors react given the lackluster appetite for IPOs in recent years.
Reddit’s IPO is also the first initial public offering of a social media company since Pinterest went public back in 2019. Interestingly, however, Reddit seems to be pitching itself to investors as not just a social media company, but a search engine company as well.
In its prospectus, Reddit notes, “The internet has given people the tools to redefine how we live. We have search engines to find content and social networks to share and follow each other. Our community of communities sets itself apart with its unique combination of characteristics and is designed to provide users with a trusted place to be authentic to themselves in sharing and discovering while maintaining their privacy.”
The prospectus also revealed some updated stats about the platform. According to the prospectus, Reddit now has over 100,000 active communities and 73 million average daily active uniques. In total, the platform has one billion cumulative posts.
While not mentioned in the prospectus, Reddit also recently entered into a deal with Google, giving the search giant access to its user-generated content, which Google will use to help train its large language model AI systems.
With this deal, Google says it “will now have efficient and structured access to fresher information, as well as enhanced signals that will help us better understand Reddit content and display, train on, and otherwise use it in the most accurate and relevant ways.” Reuters cited unnamed sources who said the deal is worth $60 million per year.
Reddit also revealed it had $804 million in revenue in 2023. That was a 21% increase over the $666.7 million in revenue the company generated in 2022.