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Reddit IPO: Going Public

Reddit Initial Public Offering

Investors are eagerly awaiting Reddit’s IPO after the company said it had filed with the SEC in secret.

So, what’s the latest on Reddit’s long-awaited IPO? What do we know?

About Reddit’s Initial Public Offering

The Company History

Steve Huffman and Alexis Ohanion, who were roommates at the University of Virginia, started Reddit in 2005. The two of them wanted to make an app that let people order sandwiches online. They shared ideas with Y Combinator in the hopes that the seed funding incubator would support the idea.

Dr. Paul Graham, a partner at Y Combinator, said no to the idea. In 2005, most people didn’t use apps, and the idea of them was thought to be crazy. Still, Paul was interested in his roommates and suggested that they use a bulletin board-style platform to share news. Reddit (“Read It”) was made because of the idea, and the idea soon came true.

Condé Nast paid $10 million for Reddit in October 2006. Huffman and Ohanion worked for Reddit until 2009 as part of a contract. Reddit became a separate business unit of Advance Publications, the parent company of Condé Nast, at the end of 2011. Huffman and Ohanion came back to Reddit in 2015 after going their separate ways. CEO was given to Huffman, and Executive Chairman was given back to Ohanion.

“The Front page of the World Wide Web”

Reddit is now made up of a very large number of forums. Users, who are called “Redditors,” can talk to each other about their thoughts, news, and debates. Posts can be voted on by everyone in the Reddit community. Votes can be up or down. There are more than 130,000 different subreddits, which are small forums and communities. They talk about almost anything you can think of, from stocks to public panics to specific video games. You can find a subreddit for just about anything you can think of.

Subreddit communities like r/WallStreetBets have become more popular and more controversial in the last few months. Reddit has been in the news because it helped stocks like GameStop, Bed Bath & Beyond, and meme stocks go up in price and then drop sharply.

The site says that it is the “home page of the internet.” And it’s not too far off. If you’ve ever looked for answers on the internet, there’s a good chance you found them on Reddit. Users have been able to spot trends and news before anyone else for a long time. With so many users, a popular post can become the next big thing on the internet or on the stock market.

Reddit’s Company Growth Suggests an IPO

At the moment, the site is the 19th most popular on the internet. And it doesn’t look like it will slow down. Reddit is expected to have 52 million daily users in October 2020, which is a 44 percent increase from the previous year. Jen Wong, Reddit’s chief operating officer, stated:

We’re sharing [daily active users] for the first time as a more accurate reflection of our user growth and to be more in-line with industry reporting… We’re focused on daily usership and increasing this number as we continue to grow our community and scale our advertising business.

In an interview with the Wall Street Journal in December 2020, Wong said that the number of users and its advertising grew at the same time. For the year 2019, the company made more than $100 million from ads. But Reddit announced last month that it made $100 million just from ads in the second quarter. The earnings are a record high for the company, as they are up 192 percent from the same time last year.

Reddit is getting money so that it can keep growing. In addition to reaching a milestone for ad revenue, Reddit raised more than $400 million in a Series F funding round. And when it goes public, the company could be worth $15 billion.

Reddit could be worth $15 billion if it goes public

Investors think that a Reddit IPO is coming up soon because the company has gone through several funding rounds. Also, the value of the company has more than tripled since it was worth $3 billion in 2019. Here’s what’s going on…

In early 2021, the company’s Series E funding round brought in almost $370 million. With these funds, the company raised a total of about $800 million. On August 12, Reddit announced plans for an even bigger windfall. Fidelity will lead a Series F round, which will bring in even more money.

The company told TechCrunch that in August, it got $410 million from Fidelity. With the money, Reddit is now worth $10 billion, which is up from $6 billion in February 2021.

In an interview with the New York Times, Huffman said that the most recent round of funding wasn’t planned, but that “Fidelity made us an offer we couldn’t refuse.” Huffman went on to say that Reddit is still planning to go public, but that there isn’t a set date yet. When they can, all good companies should go public.

In December, the company sent a draft of its registration to the SEC. And the company could be worth $15 billion when it goes public. Here are the latest news.

Reddit’s IPO could happen as soon as mid-2022

The date for Reddit’s IPO has not been set. But the company filed a draft with the Securities and Exchange Commission (SEC) in December that was kept secret. This was to start the IPO process.

Due to the confidential filing, not much is known about the Reddit IPO right now. In other words, there is no date, number of shares, or price offer for the IPO. Also, the company didn’t say what market or ticker symbol it would be on.

Morgan Stanley and Goldman Sachs will help the company with its initial public offering (IPO). Also, the company might go public as early as July.

The fact that Reddit filed with the SEC means that investors should get ready for Reddit stock soon. It’s not clear when the Reddit IPO will happen, but investors should remember that confidential filings must be made public at least 15 days before the IPO. An announcement could come any day now, so check back here for the latest updates!

Always do research before you put money into something. For the first few months, IPOs can be risky. And prices of stocks can change quickly. But if IPO investing interests you, check out our top recent IPOs and our IPO calendar. We update it every day to give you the latest information about IPOs that are coming up or have already been filed.

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Oliver Moore

Oliver Moore