Reddit Scheduled For IPO Launch in March, Set to Offset 10% of Stocks – Report
San Francisco-based social media giant Reddit is scheduled for an initial public offering (IPO) in March, according to a Reuters report.
Reddit, famous for its role in the meme stock frenzy of 2021, is making its second attempt at a public listing after an initial move in December 2021.
During its first IPO attempt, the social media giant was valued at $10 billion, but it is planning to keep its valuation confidential until the IPO concludes.
IPOs 2024: @Reddit to go public via IPO in March 👀
— MartyParty (@martypartymusic) January 18, 2024
Although the location of the listing is not specified, sources familiar with the matter confirm that Reddit plans to offer 10% of its shares to the public. However, the IPO launch is not yet finalized, and there might be a potential delay.
In the event the platform proceeds with its plans, it would become the first social media company to go public since Pinterest in 2019.
The company, founded in 2005 by entrepreneur Alex Ohanian and web developer Steve Huffman, is expected to make its official filing by February, launch the IPO roadshow by early March, and wrap up the event by the end of the same month.
Known for its simplistic design and innovative founders, Reddit allows users to vote on content posted by others and was an early adopter of the crypto tipping feature. In 2022, the platform introduced a non-fungible token (NFT) program in an effort to achieve profitability.
Co-founder Alex Ohanian earlier commented that the company has yet to turn a profit since its inception almost two decades ago.
Sources: Reddit expects 2023 ad revenue up 20%+ to slightly over $800M; ad executives say Reddit is asking them to increase their spending by ~20% in 2024 (Cory Weinberg/The Information) https://t.co/Wx6LlVfZvZ pic.twitter.com/BxNWmHY5Bw
— Karbon Designed (@karbondesigned) December 26, 2023
However, recent data shows that Reddit is expected to generate slightly over $800 million in 2023. This will equate to over 20% in ad revenue, which could be the trigger for its IPO push this year.
Reddit’s Ad Revenue Up But Competition Still Strong
The competition within the social media landscape is intensifying each year. More social networks are tussling for limited ad dollars with the proliferation of options.
Presently, Meta, the parent company of Facebook, and TikTok hold the largest share of ad revenue, while Reddit is looking to have a share of the fast-shrinking pie.
According to a post on X (formerly Twitter) by Matt Navara, TikTok surpasses Instagram in daily usage in the United States. When TikTok and Reddit are considered together, TikTok leads with a 547% increase in time spent, while Reddit follows closely with a 119% increase between 2019 and 2023.
TikTok Beats Instagram in Daily Usage in the U.S
But Meta Leads for Ad Revenue
Daily time spent on each platform 2019 to 2023
TikTok:⬆️ 547%
—
Reddit:⬆️ 119%
Instagram:⬆️ 57%
Twitter / X:⬆️ 37%
Snapchat:⬆️ 29%
—
Facebook:⬇️ 2%https://t.co/OeuTPuDWPg pic.twitter.com/YO44aPUwkc— Matt Navarra – Exiting X… Follow me on Threads (@MattNavarra) August 25, 2023
Despite these usage trends, Meta still holds the largest stake in terms of ad revenue.
The growth in daily usage has translated into positive financial outcomes for Reddit, as its ad revenue is expected to increase from 14.2% to 15.9% this year.
