The planned IPO also presents a test for Reddit users to demonstrate their loyalty to the platform.

After three years of contemplation, the famous social media platform Reddit is about to launch its initial public offering (IPO) and is expected to enter the stock market in March. According to a Reuters report on Thursday, citing people familiar with the matter, the company secretly applied for an IPO in December 2021 and hopes to go public in February 2024.

Reddit to sell 10% of stake to investors

The IPO process is expected to begin with a roadshow in early March and is expected to end with the actual completion of the IPO in the same month.

The San Francisco-based company plans to sell about 10% of its shares during the IPO, with the exact valuation to be determined closer to the listing date. In 2021, the social media platform was valued at about $10 billion in a funding round led by Fidelity Management Co. with participation from other venture capital firms.

Last year, the company unveiled plans to surpass $800 million in advertising revenue, suggesting it expected to increase its potential valuation during an IPO.

Reddit is set to go public soon, and is expected to become the first major social media company to go public since Pinterest launched in 2019. The move will put the social media platform in direct competition with Pinterest.

Both platforms originated in the United States and share the common goal of navigating the competitive field of online interaction and content sharing to generate profits.

Reuters said that despite the company's careful planning, the IPO timetable may be delayed for undisclosed reasons.

Loyalty test

The planned IPO also presents a test for Reddit users to demonstrate their loyalty to the platform. Investors involved in the social media platform have contributed significantly to past surges in “meme” stocks of some major companies, including GameStop and AMC Entertainment Holdings Inc, according to Reuters.

Inside sources believe this unique feature adds an element of unpredictability to Reddit’s upcoming public debut, setting it apart from its predecessor, Pinterest.

The sector's rebound came amid a broader backdrop for social media stocks, with gains in technology stocks driving notable gains.

Shares of Meta Platforms, the parent company of Facebook, have tripled in the past 12 months, while Snap's stock has risen 60% over the same period.Reddit was founded by Steve Huffman and Alexis Ohanian in 2005. Since then, the company has become popular among users for its niche discussion groups and user-driven content curation.

The social media platform faced a backlash when it announced it would charge companies for access to its application programming interface (API), affecting users who relied on third-party apps to access Reddit.

In June 2023, the company’s CEO said the company, which offers premium access to its platform for a $5.99 monthly subscription, has not been profitable in more than a decade.

Historically, the company's financial setbacks have been tied to investments in the platform and lower user engagement with ads on its site compared to other social media platforms. #Reddit  #IPO