Nearly 20 years after it first launched as an online message board, Reddit is going ahead with plans to offer shares to the general public. On Thursday, the business formally filed for an initial public offering (IPO) with US financial regulators.

The amount of money the company hopes to raise by listing on the New York Stock Exchange is not stated in the paper. However, it offers an insight into the company’s workings, especially its challenges in monetizing its internet following.

The website functions as a forum where users can discuss and post questions about subjects that interest them. It has gained notoriety for its jokes, open dialogues, and members’ capacity to band together to boost the stock prices of improbable businesses.

Attracted by features like its regular “ask me anything” forums, where users ranging from anonymous nobodies to former US president Barack Obama field inquiries, more than 76 million people accessed the platform on average every day in December 2023.

In 2021, it was appraised at roughly $10 billion during a private funding round.
However, since its founding, the business has lost money every year—more than $90 million this past year. According to the petition, Reddit did not begin making substantial attempts at generating revenue until 2018. With $804 million in revenue last year, it made over 20% more than it did in 2022.

Almost all of the site’s income came from advertising, but CEO Steve Huffman expressed excitement about potential to turn the platform into a marketplace and grant content licences to AI startups in a letter to potential investors.

On Thursday, the business said that it was growing its collaboration with Google, which licences its content to develop its AI technologies.

“I have never been more excited about Reddit’s future than I am right now,” Huffman wrote. “We have many opportunities to grow both the platform and the business, the latter through advertising, monetizing commerce on the platform, and licensing data.”

Since Pinterest’s IPO in 2019, Reddit would be the first social media firm to do so.
It happens at a time when US financial markets are consistently reaching all-time highs, driven by optimism about the state of the economy and a fresh wave of artificial intelligence-driven growth.
Reddit, which quietly filed for an IPO in late 2021, was reportedly planning to try to sell close to 10% of its shares during the listing, according to Reuters.

According to the corporation, by making this change, consumers will have a greater chance to literally control the platform. Some of its shares are being held back for its most active users.
Unsurprisingly, news of the company’s intention to go public has been shared on Reddit, where opinions have been varied.

“No way I’m touching this with a 10 foot pole,” wrote one user, lafindestase, warning of the risk of bots infecting the site.

While someone else asked, “Reddit IPO? Error or meme?”

Huffman and Alexis Ohanian—the husband of tennis player Serena Williams—founded Reddit in 2005.

Rapper Snoop Dogg and Chinese company Tencent Holdings, together with venture capitalist Andreessen Horowitz, have all backed the project.

(Adapted from BBC.com)