Reddit, the popular online forum, is preparing to go public with an expected valuation of up to $6.5 billion in its upcoming IPO. The company plans to price its shares between $31 to $34 each, with employees being allowed to sell stock during the offering. Reddit's last private funding round in 2021 valued the company at $10 billion.
Notable shareholders in Reddit include Sam Altman, the CEO of OpenAI, whose shares could be worth over $400 million at the high end of the IPO range. Other shareholders include Tencent and Advance Magazine Publishers, the parent company of Condé Nast.
In its latest IPO prospectus, Reddit reported $804 million in revenue for 2023, a 20% increase from the previous year. The company's net loss also narrowed in 2023. Reddit is offering a "directed share program" for its non-employed forum moderators, known as Redditors, to participate in the IPO.
The company faced some controversy last summer when several Reddit moderators locked their communities in protest of changes to the platform's API pricing. Reddit stated that the changes were necessary due to the use of its data by tech companies training large language models.
Reddit's IPO comes during a slow period for IPOs, but the company's debut is expected to be the first major tech offering of the year and the first social media IPO since 2019. The vice-chair of the New York Stock Exchange expressed optimism about the IPO market in 2024, citing a robust pipeline of potential offerings.
Overall, Reddit's IPO is anticipated to be a significant event in the tech and social media sectors, with potential implications for the company's profitability and future growth.