- IPO
- February 23, 2024
- 3 minutes read
Social Media Giant Reddit Files For IPO
Reddit, the popular online forum and message board, has filed plans to list its shares on the public markets. The…
Reddit, the popular online forum and message board, has filed plans to list its shares on the public markets. The company has unveiled its S-1 filing with the U.S. Securities and Exchange Commission (SEC), showing its plans to list on the New York Stock Exchange with the “RDDT” symbol.
Reddit has come a long way since its founding in 2005. The company was acquired by mass media firm Condé Nast barely a year after its inception. It later became an operationally independent subsidiary of the mass media firm and raised over $1bn in venture funding. Its biggest shareholder remains Advance Publications, the parent firm of Condé Nast.
As expected, Reddit’s S-1 filing provides insights into its business previously unknown to the public. The San Francisco-based company reported a $91mn net loss on $804mn in revenue in 2023, compared to a $159mn loss on $667mn in revenue in 2022. Reddit has never posted profits since its inception, the S-1 indicates.
According to the filing, Reddit’s biggest shareholders outside Advance Publications include Fidelity Investments, Chinese tech giant Tencent, and investor-cum-OpenAI chief executive Sam Altman.
- Advance Publications holds a 34.5% stake;
- Fidelity Investments owns 9.6% of outstanding shares;
- Tencent owns 11.7%;
- Entities affiliated with Sam Altman own 8.7%. This figure includes shares personally held by Altman and those held by his venture capital firm on behalf of external investors.
According to the S-1 filing, Reddit paid its chief executive, Steven Huffman, $193mn in 2023, including $466k in salary and bonuses, $98mn in stock awards, and $94mn in stock options. The stock awards will vest over 5 years, and the options will vest over 10 years, subject to Huffman’s continued employment as chief executive.
Reddit was valued at $10bn in its last funding round in 2021. However, with tech industry valuations down across the board, the company has slim chances of reaching that valuation in its public listing. Reddit’s bankers are reportedly seeking a $5bn+ valuation, which sounds more realistic.
