Social media platform Reddit — home to AMAs, Wall Street Bets and thousands of other online communities — filed its registration statement for its initial public offering on Thursday, detailing plans moving forward with advertising, data sales, analytics, and what it called an emerging user-based economy.
The company, founded in 2005, plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” The filing did not reveal the number of shares to be offered or their potential price. Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America Securities are the lead bookrunners.
Reddit has for the first time confidentially filed a draft registration statement for a proposed public offering in 2021.
Reddit also said it would offer some of those shares in the IPO to its users and moderators, depending on their reputation and contribution to the platform. These participants must be over 18, live in the United States and have an account on or before January 1.
“We want that sense of ownership to be reflected in real ownership — so that our users are our owners,” Steve Huffman, co-founder and CEO, said in the IPO filing for Reddit. “Becoming a public company makes this possible. With this in mind, we are excited to invite users and moderators who have contributed to Reddit to purchase shares in our IPO, along with our investors.
The company's public debut will come amid potential implications for life in the IPO market this year, and as Reddit tries to compete with much larger rivals like Meta Platforms Inc. META,
And TikTok. Meanwhile, some digital media outlets are waiting for a bigger rebound in the digital advertising market.
Reddit also warned, in its IPO prospectus, that user engagement could come and go based on big cultural events — like the pandemic or the Russian invasion of Ukraine. She cited the possibility of competitors copying its own features as a potential risk.
The company's sales last year grew to $804 million, up 20.5% year over year. However, he loses money. It incurred a net loss of $90.8 million last year.
However, the company said that in December it attracted more than 500 million visitors. In the quarter that ended Dec. 31, Reddit said it had an average of 73.1 million daily active members — or people who dropped by at least once in a 24-hour period. In the prospectus, Reddit attempted to present itself as a vast repository of human experience and interaction.
“Whatever people enter or experience is on Reddit,” Huffman said in the filing.
He said Reddit is working on developing more ways for users to earn money on the platform. The filing highlighted moves to allow users to earn money by creating avatars, offering photo editing services, selling watches, and commissioning artwork. It said it plans to offer more developer tools, and increase the ways users can “recognize contributors with real money to incentivize and reward high-quality content creation.”
Reddit said it takes a cut of avatar creators' profits, and said building the user economy “will allow us to grow new revenue streams beyond advertising.”
Similar efforts have not always succeeded. When Hasbro Inc. owns…
Wizards of the Coast, which oversees the “Dungeons & Dragons” role-playing game, proposed paying royalties to top-earning game developers whose work used D&D infrastructure, and those efforts backfired last year after protests from creators.
Reddit also wants to find ways to make the ads that appear on its site clearer, more accurate, and based on artificial intelligence. She said she wants to offer more video ads, and ads in new places, such as comment threads and search pages, alongside ads in the home page feed.
Reddit also said it is “in the early stages of allowing third parties to license access to research, analyze, and view historical and real-time data from our platform.” Customers can pay for real-time data feeds of anonymous public discussions on Reddit, she said. The filing also stated that content on Reddit could be used to feed AI and large language models.
“Reddit is one of the largest online collections of original, constantly updated human-made experiences,” the filing said. “In an increasingly data-driven world, we recognize that this information is increasingly important for a wide number of different uses and applications.”
“We believe the Internet should work for consumers and they should be able to find the information they need or the experiences they want,” the filing continued. “Organizations need to prioritize real-time sources of human perspective — from a company looking for feedback on a new consumer product to investors trying to pick up on market sentiment or signals — and Reddit provides a different solution.”
Separately, Reddit announced a deal that will allow Alphabet's Google,
Google,
Google uses Reddit posts to train its AI models and improve Google search. The deal, worth about $60 million, “will make it easier to discover and access the communities and conversations people search for on Reddit,” the company said.
