Reddit Files for IPO - Potential Game-Changer in the Tech Market?

On February 22, 2024, the social media company Reddit, founded in 2005 by Alexis Ohanian and Steve Huffman, submitted its IPO prospectus to the Securities and Exchange Commission (SEC) after a lengthy buildup. 

Its market debut, slated for March, marks the first major tech initial public offering of the year and the first social media IPO since Pinterest Inc. (PINS:US) went public in 2019. Moreover, the company intends to trade on the New York Stock Exchange (NYSE) under the symbol “RDDT.”

According to the IPO filing, Reddit disclosed a reduced net loss of $90.8 million for the year ending December 31. Reddit reported $804 million in annual sales for 2023, showing a 20% increase from the previous year's $666.7 million. Its primary revenue source is online advertising sales from its website and mobile app.

Despite being one of the most-visited websites in the U.S., as per analytics firm “Semrush,” Reddit has faced challenges in establishing a robust online advertising business comparable to tech giants like Meta Platforms (META:US) and Alphabet Inc (GOOGL:US). The platform boasts over 100,000 communities, with 73 million average daily active users and 267 million average weekly active users, as stated in the filing.

With this IPO, Reddit could enter the congressional trading arena. What remains to be seen is whether this social media firm would become one of the political trader's favorites like META, SNAP, or PINS or would it be just another social media issuer in the list.