Reddit Gears Up for Major Fundraising Through Public Offering Aiming for a $750 Million IPO

The social media platform Reddit is preparing to go public and raise nearly $750 million through an initial public offering (IPO) of its common stock. According to regulatory filings, the IPO will involve 22 million shares of Class A common stock, with Reddit offering approximately 15.3 million shares and existing stockholders offering around 6.7 million shares.

Pricing and Allocation Details

Reddit anticipates pricing the IPO between $31 and $34 per share. At the midpoint of this range, the company would raise about $451 million from the offering. The funds raised are intended for general corporate purposes, potential acquisitions, and tax obligations. Notably, Reddit has reserved up to 1.76 million shares for eligible users, board members, employees, and their friends and family to purchase at the IPO price through a directed share program.

Overallotment Option and User Statistics

The underwriters have been granted the option to purchase an additional 3.3 million shares to cover any overallotments. Reddit, founded in 2005, boasted an average daily visit of over 76 million users in December, according to co-founder Steve Huffman’s letter included in the filing. The platform hosts more than 100 million unique subreddits.

Financial Performance and Strategic Partnerships

In the October-December quarter, Reddit reported its first profit in two years, with net income of $18.5 million on revenue of $249.8 million, primarily driven by advertising. Additionally, the company has struck a deal with Google, valued at approximately $60 million, allowing the search giant to use Reddit posts for training its AI models and improving services like Google Search. In return, Reddit gains access to Google’s AI models to enhance its internal site search and other features.

Listing and Ticker Symbol

Reddit’s shares are expected to be listed on the New York Stock Exchange under the ticker symbol “RDDT.”