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Reddit IPO: Everything you need to know

Shares /
Axi Team
Everything you need to know Reddit IPO

Reddit is ready — the IPO is coming

After much speculation, Reddit has announced the date for its highly-anticipated IPO. The San Francisco-based tech giant decided to go public in March 2024.

Save the date: On Thursday, March 21, 2024, Reddit will go public with a target valuation of $6.4 billion and a projected share price of $31 to $34. Despite concerns about the company´s profitability, the IPO is almost five times oversubscribed.

Reddit filed to go public in 2021, aiming for a valuation of $15 billion dollars at that time. During that year, the coronavirus pandemic reached its peak, creating a nation of “armchair traders”. As a result, interest in online forums such as Reddit skyrocketed. Reddit’s investing forum WallStreetBets became the platform driving the meme stock market frenzy that included relatively obscure stocks such as GameStop and AMC.

In February 2021 and at the height of the meme stock frenzy, Reddit’s value doubled to $6 billion from a year earlier. Six months later, in August 2021 Reddit was valued at $10 billion in a private fundraising round.

 

Reddit company stats

Founded 2005
Headquarters San Francisco, California, United States
Number of employees 700
Revenue 2021 $350 million
Stock Exchange New York Stock Exchange
Potential Valuation $6.6 billion

Source: Wall Street Journal

 

Why investors care about Reddit

Reddit was founded in 2005 by the University of Virginia roommates Steve Huffman and Alexis Ohanian. In 2006 it was sold to global media company Conde Nast, which owned it until 2011 when it became “an independent subsidiary” of Advanced Publications, the company that owns Conde Nast.

As of 2022, it has around 52 million daily active users across 100,000 online communities and 1.7 billion global monthly visitors. The self-declared ‘front page of the internet’ contains a massive collection of forums where people can share news and content or comment on other people’s posts.

Reddit has a young demographic — The biggest age group is people between 18-29 years old. In 2022 Reddit ranked as the 20th most visited website in the world. It makes money primarily by advertising, premium subscriptions, and the sale of digital items like NFTs.

For the second quarter of 2021, Reddit had revenues of $100 million, representing a 192% increase compared to the same period in 2020. Its 2021 total revenue from advertising was $350 million. In 2023 Reddit generated $800 million in ad revenue, which represents an over 20% increase year-over-year, according to Forbes.

 

The IPO: When, where and what to expect

Reddit’s IPO was initially expected to happen in Q4 2021, but like many listings that have been affected by market volatility, it has been continually pushed back. After three years of speculation, Reddit will finally go public on 21 March 2024.

When it first filed for an IPO in December 2021, Reddit hoped for a $15 billion valuation, but it is now expected to launch a listing at a $6.4 billion valuation.

 

3 steps to trade Reddit IPO with Axi

An Initial Public Offering (IPO) is an investor’s first chance to gain exposure to an organisation. An IPO is an important milestone for a company looking to raise capital and an opportunity for investors to get involved in a hopefully growing business.

With Axi you can get exposure to Reddit IPO as soon as it’s listed on a specific exchange and prices from the exchange become available to our liquidity providers.

  1. Login to your live MT4 trading account (sign up with Axi if you don’t have one)
  2. Navigate to market watch, right-click, and select ‘show all’. Search for Reddit.
  3. Choose your position and size and go long or short on share prices. Don’t forget to set risk management tools like a stop loss and take profit order. 

 

Sources: The Wall Street Journal, Reuters, Business Insider

 

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The data is sourced from third-party providers. This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.



Axi Team

Axi Team

The Axi team is full of people with decades of financial industry experience and knowledge of almost every aspect of trading. The Axi Team blog, in addition to regular posts from our daily market analysis contributors, is a place to share wider insights and ideas. In this section, you’ll find posts about everything from Forex education and helpful hints for new traders to product updates and important market announcements. 


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