The social network Reddit plans to raise around US$500 million during its IPO on the New York Stock Exchange, according to a document published Monday by the American markets regulator, the SEC.
The listing of the platform known for its discussion forums is an important test for the IPO market, which has been slowing down since a surge in September 2023. The date has not yet been set.
In detail, the San Francisco company will issue 15.2 million new securities, at a price estimated between $31 and $34. At the median price ($32.5), this would allow Reddit to raise around $500 million in new money.
To this are added 6.7 million shares sold by existing shareholders, as well as 3.3 million shares set aside by partner banks in the event of significant demand (over-allotment).
In total, approximately 25.3 million securities could be placed, for an estimated value of approximately $822 million.
Actions for users
Within this lot, Reddit reserved 1.76 million shares for “Redditors”, that is to say the most active users and moderators on the site.
This listing on the New York Stock Exchange will be the first for a social network since that of Pinterest in 2019.
Including stock options already issued, the group would be valued at around $6.5 billion.
In documents available on the SEC website, Reddit mentions having 73 million daily active users on average and more than 267 million weekly users.
Despite its success with the public, the platform with 100,000 forums (concerning celebrities, video games, social issues or even businesses) has never managed to make a profit.
Strong revenues for a social network
Like Facebook, Instagram, YouTube or TikTok, its business model is based on advertising, but the revenue it earns from it is incommensurate with that of its major rivals.
In 2023, Reddit generated $804 million in revenue, an increase of 20.5% from the previous year.
The platform also intends to grow its revenues through contracts giving access to public data on its site, very popular with artificial intelligence (AI) companies, which use it to develop their interfaces.
Created in 2005 by two students from Virginia (eastern United States), the social network was bought in 2006 by Condé Nast, publisher of Vogue, The New Yorker and Vanity Fair magazines.
The company became an independent subsidiary in 2011, but Advance, the controlling holding company of Condé Nast, is still the largest shareholder.