The Blubber

Reddit has drawn up detailed plans to launch its IPO in March, per Reuters.

It would mark the inaugural IPO of a major social media company since Pinterest's introduction in 2019, and Reddit and its counterparts are contending fiercely for advertising revenue against competitors such as TikTok and Facebook.

The potential IPO would also gauge the willingness of certain Reddit users to support the company's stock market debut. Numerous investors on the platform have played a role in fueling numerous "meme" stock surges over the past three years, from GameStop to AMC Entertainment Holdings.

Reddit, having filed confidentially for its IPO in December 2021, intends to make its public filing in late February, commence its roadshow in early March, and finalize the IPO by the end of March, as per two undisclosed sources.

The San Francisco-based company, valued at around $10 billion in a 2021 funding round, aims to sell approximately 10% of its shares in the IPO, the sources added. The decision on the IPO valuation it will pursue will be made closer to the listing date.

It's worth noting that Reddit's IPO plans could experience delays, as has occurred in the past, according to the sources, who requested anonymity to safeguard confidential discussions.

A Reddit spokesperson declined to provide comments.

Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit gained recognition for its specialized discussion groups and the user practice of voting "up" or "down" on posted content. The company, primarily reliant on advertising for revenue and offering premium access for $5.99 per month, has yet to achieve profitability, according to a Reddit post by Huffman in June.

The company attributed its losses to platform investment and lower user engagement with advertising compared to other social media platforms. It refrained from initiating the IPO until nearing profitability, and bouts of market volatility also contributed to delaying its plans.

Reddit, anticipated to generate slightly over $800 million in advertising revenue in 2023, announced last year that it would charge companies for access to its application programming interface (API), which tech firms use for training large-language models in artificial intelligence. This decision upset some users dependent on third-party apps to access Reddit.

Over the past year, large social media stocks have rebounded, primarily driven by a surge in technology stocks amid peak interest rates. Meta Platforms, operator of Facebook, witnessed a more than threefold increase in shares over the last 12 months, while Snap's shares rose by 60% during the same period.