Reddit Plans To Raise Up To $748 Million in Its IPO—What You Need To Know

Reddit and its investors aim to raise up to $748 million in its upcoming initial public offering (IPO), with the social media company expected to start trading on the New York Stock Exchange under the symbol “RDDT" as soon as Thursday. 

The social media company and its existing shareholders are planning to sell 22 million shares for $31 to $34 each, according to a filing with the Securities and Exchange Commission (SEC) last week. The social media company could price its shares as soon as Wednesday.

With Reddit's IPO reportedly between four to five times oversubscribed, it could be likely that the social media platform may reach the $6.5 billion valuation it is targeting.

Reddit said that 1,760,000 shares, or 8% of shares offered, will be reserved for its users. Its user share program is set to come in six phased priority tiers, with each eligible participant assigned a tier "based on that participant’s contributions to Reddit" measured by Redditors' karma, the metric of a user's community contributions to the platform.

The company had filed for its IPO at the end of February. In its IPO filing, Reddit reported its 2023 revenue was $804 million, representing 21% growth from 2022's $666.7 million. The company said its gross margin for 2023 was 86%, up from 84% in 2022. Its net loss of $90.8 million in 2023 narrowed from a loss of $158.6 million the previous year.

Reddit reported 73.1 million daily active users in the fourth quarter of 2023, up 27% year over year.

Sam Altman, CEO and co-founder of ChatGPT maker OpenAI, is also among those holding more than 5% of its capital stock after he bought more than a million shares at an aggregate purchase price of more than $60 million, Reddit disclosed.

The IPO comes as Reddit faces an inquiry from federal regulators and claims from Nokia that the social media company may have violated certain Nokia patents. Reddit said it wasn’t surprised by the probe and denied being involved in any “unfair or deceptive trade practice,” though Reddit warned that such inquiries can be “lengthy and unpredictable” and could adversely affect its business.

Correction—March 20, 2024: This article has been updated to clarify additional details on Reddit's anticipated pricing, start of trading, and regulatory information.

Correction—March 16, 2024: This article was corrected to reflect it’s the company and existing shareholders planning to sell 22 million shares, according to a filing with the Securities and Exchange Commission.