By
Temitope Olatunji
April 26th, 2024
Reddit recently disclosed its crypto holdings as it is planning to sell its shares during the hotly anticipated IPO.
After years of meticulous planning and waiting, top-tier American social news aggregation platform, Reddit Inc is now in the final stages of going public. According to people familiar with the matter, Reddit intends to raise up to $748 million in one of the biggest initial public offerings (IPOs) in the United States this year. Reportedly, the globally recognized social networking platform is seeking to sell 22 million shares at a price range of $31 and $34 during the IPO.
The Reddit IPO will be a major market check for new public listings after a slow 2023. Moreover, US-based IPOs tumbled from $339 billion in 2021 to about $26 billion in 2023. Nevertheless, the stock market has been performing remarkably well YTD compared to last year, amid anticipated interest rates cuts in the coming quarters.
Reddit IPO at a Close Glance
Reddit has been preparing for its IPO for the past few years. The company has already reduced its operating losses in order to attract more investors amid changing global macroeconomics. According to Reddit’s February listing, the company has a growing customer base of about 73.1 million daily active unique users.
As a result, Reddit reported a net loss of $91 million on revenue of about $804 million in 2023, a dramatic improvement from a net loss of $159 million on revenue of $667 million in the prior year.
Founded in 2005, Reddit is largely owned by Advamce Magazine Publishers Inc., which acquired it in 2006 and spun the coming in 2011. Over the years, Reddit has grown into a major advertising platform due to its global presence.
“Advertising is our first business, and advertisers of all sizes have discovered that Reddit is a great place to find high-intent customers that they aren’t able to reach elsewhere. Advertising on Reddit is rapidly evolving, and we are still in the early phases of growing this business,” Reddit co-founder and Chief Executive Officer, Steven Huffman, recently noted.
Reddit’s IPO is a major flop on its prior valuation, whereby the company raised funds in 2021 at a valuation of about $10 billion. A year later, the company indicated that it could be valued at about $15 billion.
Web3 and Digital Asset Ventures
In order to keep up with heightened competition from other social media platforms like Elon Musk-backed X (formerly Twitter), Reddit has been incorporating digital assets in its operations.
For instance, Reddit ran crypto community point tokens last year before closing them in preparation for the IPO.
Mid-last month, Reddit disclosed that it has held Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC) on its balance sheet.