Friday, January 21

Reddit Unveils IPO After Igniting Meme Stock Frenzy Of The Year

Reddit, the social media platform that helped fuel the frenzy for meme actions this year, said it has been confidentially submitted for an initial public offering.

The San Francisco-based company said in a statement Wednesday that the number of shares and the proposed price range for an IPO have not been determined. He said the listing is expected to occur after the US Securities and Exchange Commission completes its review process, subject to market and other conditions.

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The company, which was valued at $ 10 billion by investors in a funding round this summer, did not disclose what valuation it would seek on the IPO.

Reddit saw a surge in interest this year after a forum on the site, WallStreetBets, rocked the stock market. The trading frenzy, fueled in large part by postings on the site, rocked GameStop Corp, AMC Entertainment Holdings Inc. and silver prices. The result was a rewrite of the previously understood rules of Wall Street trading.

Founded in 2005, the company has grown into one of the most influential social media companies in the world. In February, Reddit said it had more than 50 million daily users. The website hosts message boards on a wide variety of topics, with more than 100,000 active groups.

Reddit started after Steve Huffman, now CEO, and Alexis Ohanian met at the University of Virginia. Reddit parted ways with its social media contemporaries like Twitter Inc. and Facebook when it was acquired by Conde Nast in 2006. The magazine’s publisher later spun off the company and Reddit went through a couple of CEOs before Huffman returned to the helm. in 2015.

In recent years, Reddit has faced controversy over a relatively hands-off approach to moderation on the site, which critics say allows racism and violent speech to escalate.

Earlier this year, after Huffman said that while he believed masking and getting vaccinated was the right way to go during the pandemic, Reddit was “a place for open and authentic discussion and debate,” even for “conversations that they question or disagree with the popular consensus. ” “Days later, the company posted that” many of our users tell us they are confused and even frustrated with our handling of Covid denial content on the platform “and banned a subreddit that allegedly had misinformation related to Covid.

In March, in a first step toward a public listing, Reddit hired Drew Vollero as its first CFO. Vollero is known for leading Snap Inc.’s IPO in 2017.

Reddit generated ad revenue of $ 100 million for the first time in the second quarter, nearly triple what it was a year earlier, Reddit said in a statement in August. Now you’re looking to dig into audio and video, where ad fees tend to come at a premium.

Details of Reddit’s operations and finances will be reported later in a public filing if it proceeds with an initial public offering.

© 2021 Bloomberg

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