Rumours are swirling that 2023 might be the year when the San Francisco-based tech giant will finally go public.
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.
|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
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.
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. It is now expected to list on the New York Stock Exchange sometime in 2023 if market conditions allow it.
When it first filed for an IPO in December 2021, Reddit hoped for a $15 billion valuation, but it is now likely to be worth less if a listing takes place in 2023. Asset management firm Fidelity has valued the IPO at $6.6 billion, more than half its previous reported value.
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.
Sources: The Wall Street Journal, Reuters, Business Insider
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