Reddit, the popular social media platform that hosts millions of online communities and discussions, has filed publicly for an initial public offering (IPO) on the New York Stock Exchange (NYSE) under the ticker symbol $RDDT. The company, which was founded in 2005 and has more than 73 million daily active users, plans to raise up to $1.5 billion in its IPO, according to its S-1 filing.
Reddit is one of the most influential and controversial websites on the internet, known for its vibrant and diverse user-generated content, ranging from news, memes, videos, games, politics, science, and more. The company has also been at the center of some of the most notable events and movements in recent years, such as the GameStop stock frenzy, the Capitol riot, the Black Lives Matter protests, and the Covid-19 pandemic.
Reddit’s business model is based on advertising, premium subscriptions, and data licensing. The company reported a revenue of $804 million in 2023, up 21% from $667 million in 2022, and a net loss of $91 million. The company also said that it expects to grow its revenue by expanding its advertising products, increasing its user base and engagement, and developing new revenue streams, such as e-commerce, live streaming, and podcasts.
One of the key aspects of Reddit’s growth strategy is its investment in artificial intelligence (AI), both internally and externally. The company said that it plans to use AI to improve its content moderation, personalization, recommendation, and search capabilities, as well as to create new products and features that enhance the user experience. The company also said that it has signed data licensing deals with several AI companies, such as Google and OpenAI, to allow them to use Reddit’s vast and unique archive of human conversation for AI training and research purposes.
Another interesting fact about Reddit’s IPO is that one of its major shareholders is Sam Altman, the CEO of OpenAI, a prominent AI research organization that is backed by Elon Musk, Microsoft, and others. Altman, who is also a co-founder of Y Combinator, the influential start-up accelerator that incubated Reddit, holds 8.7% of Reddit’s outstanding shares, including 789,456 Class A shares and 11.4 million Class B shares. Altman was also briefly the interim CEO of Reddit in 2014, after the resignation of Yishan Wong.
Reddit’s IPO is expected to be one of the most anticipated and watched events in the tech industry this year, as it will test the market appetite for a social media company that has a loyal and passionate user base, but also faces significant challenges and risks, such as content moderation, user privacy, regulatory scrutiny, and competition. Reddit’s valuation in the IPO is still unknown, but the company has been advised to consider a valuation of at least $5 billion, according to Bloomberg. The company could begin marketing its shares as soon as March.
