Reddit continues to push ahead with its IPO. The company has filed a confidential application with the relevant regulatory authority. With its planned stock market debut, Reddit could not only significantly increase its value, but also raise billions.
What actually is Reddit?
Reddit is a news aggregator platform – in other words, a mix of social network and Internet forum. The company now has around 52 million daily active users. All Reddit users can share posts in the form of links, images, videos or polls and comment on other content.
The platform divides all posts into specific subcategories – the so-called subreddits. There are now over two million subreddits on a wide variety of topics. However, only a fraction of the categories are actually active. One of the most discussed and best-known sub-forums is the subreddit r/wallstreetbets.
It is mainly private investors who exchange information on stock topics and options trading. But they also organize themselves. It can happen that the Reddit community artificially drives up share prices, as in the case of Gamestop.
Reddit plans to go public
The Wallstreetbets community may soon be able to buy its own platform – at least in theory. Because Reddit wants to go public and is pushing ahead with its plans.
On Wednesday, December 15, 2021, the company filed a confidential application with the United States Securities and Exchange Commission (SEC).
The company has now officially confirmed this. However, Reddit is keeping further details under wraps. The platform has not yet commented on a possible issue price or the number of shares. This is likely to fuel discussions in the r/wallstreetbets subreddit in particular.
Valuation of 15 billion US dollars?
The financial institution Fidelity International, which is one of the platform’s largest investors, estimated Reddit’s value at around ten billion US dollars at the beginning of 2021. According to consistent media reports, however, the network is aiming for a valuation of around 15 billion U.S. dollars for its upcoming IPO.
The platform thus wants to increase the estimate from the spring by around a third. Even if not all details are clear yet, Reddit’s stock market debut is considered as good as certain. However, the timing is still unclear. This is because the Securities and Exchange Commission (SEC) has yet to review the submitted documents.