Fanatics IPO: Everything You Need to Know About Fanatics

Reddit IPO: When will Reddit go public?

Reddit is expected to go public on the NYSE in March under the ticker symbol “RDDT.”

The debut will mark the first IPO of a social media company since Pinterest went public in 2019. Reddit has been a notorious player in global stocks, with the subreddit r/WallStreetBets famously rallying around GameStop stock in 2021.

Like many recent listings, Reddit has been eyeing an IPO since 2021, but the listing was continuously pushed back due to high volatility in equity markets. Several firms went public in the second half of 2023, sparking hope that the IPO market had recovered. Two of the most high-profile IPOs of last fall, Instacart and ARM, quickly fell below listing price but have recovered since the start of 2024.

Currently, Reddit has no intention of paying dividends and intends to use all earnings from the IPO for general corporate purposes.

What do Reddit users think about the Reddit IPO?

Reddit users on the forum r/WallStreetBets have already vocalised their concerns about the move to take the firm public. The main criticism seems to be that as a listed company, Reddit will need to start generating more income to please shareholders, which could result in users seeing more advertising and modifications to the experience.

How much is Reddit worth?

Reddit was valued at $10 billion in a private fundraising round in August 2021. When it first decided to list, it was aiming for a valuation of more than $15 billion; however, the company has lowered its sights to $5 billion according to the New York Times.

Many IPO valuations have lowered significantly over the last two years given market conditions, so the drop in expectations reflects changes in the market more so than Reddit’s performance as a company.

What does Reddit do?

Reddit is an online discussion board and community, founded in 2005 by Steve Huffman and late activist Aaron Swartz. Despite not being as popular as other social media firms such as Facebook, Instagram and Twitter, Reddit has made its name with niche—and often controversial—discussion groups.

Reddit has more than 100,000 communities, in which over 73 million active daily users share their thoughts and ideas on a range of topics. In fact, Reddit is currently the 16^th-most-visited website on the internet and the seventh-most-popular social networking site.

The site allows users to post anonymously, which is supposed to encourage honesty and transparency. Any post can be voted on by the community; posts with the largest number of upvotes are viewed more and hold greater authority.

Most recently, Reddit has become a hub of retail investors, flocking to the board r/WallStreetBets to discuss tips and ideas on stock trading. The community – known as a subreddit – was responsible for the rise of GameStop and other so-called ‘meme stocks’. Their intentions were to profit as hedge funds covered their short positions, in what’s known as a short squeeze.

How does Reddit make money?

Reddit makes its money through advertising on its site. Advertisers have the option of paying a minimum of $50,000 per quarter for a large-scale campaign or bidding on a click per thousand impressions model (CPM).

For users who don’t want ads on their feeds, there is a ‘premium membership’ available, which grants an ad-free experience. The membership costs $5.99 per month or $49.99 per year.

Reddit has also raised capital through 10 rounds of fundraising, generating a total of $1.3 bn.

Is Reddit profitable?

No, Reddit isn’t profitable. However, the company has been substantially growing revenue in the past few years. Reddit’s total revenue in 2023 was $804 million, up 21% from $666 million in 2022. Reddit’s net loss for 2023 narrowed to $90.8 million.

What is Reddit's business strategy?

Reddit’s business strategy thus far is a pretty odd one, given that the firm sacrifices the opportunity to make money in order to keep its users happy. As we’ve seen, advertising space sales are the company’s primary revenue stream. However, Reddit does not require email addresses and does not track personal information, losing out on the opportunity to increase advertising through data exploitation, in order to keep its users anonymous.

And this is where one of the biggest challenges Reddit could face comes in: regulation. Due to the anonymity of users, there’s always the possibility of malpractice and manipulation, such as bots or even hedge funds driving users toward certain stocks. Reddit does already have moderators in place, but once it’s a public firm the level of scrutiny it’ll face will likely increase. Any thread to the anonymity of users could cause an exodus from the platform.

After half a decade neglecting its ad platform, Reddit has begun to invest heavily in this area before it goes public, so we may see the company reach profitability by 2022.

After half a decade of neglecting its ad platform, Reddit has begun to invest heavily in this area. Reddit announced in 2020 that it was buying video creation app Dubsmash, entering into direct competition with TikTok.

The company hired its first-ever chief financial officer, Drew Vollero (previous CFO for SNAP), in the spring of 2023. Many analysts see the creation of this role as preparation for an IPO.

Who owns Reddit?

Reddit is owned by Condé Nast Publications, a global media company, who bought the company from founders Huffman and Ohanian one year after it was created for $10 to $20 million.

Current investors in Reddit also include Fidelity Investments, Andreessen Horowitz, Sequoia Capital, Tencent Holdings and OpenAI CEO Sam Altman.

Board of directors of Reddit

Reddit’s board of directors includes:

• Steve Huffman
• Dave Habiger
• Patricia Fili-Krushel
• Porter Gale
• Michael Seibel
• Steven O. Newhouse
• Bob Sauerberg