Reddit, the community-focused message board site, took a significant step on Thursday toward going public, paving the way for it to be the first major social media company to debut on the stock market in years and a test for private companies after a drought in initial public offerings.
In an offering prospectus, Reddit revealed its financial performance in preparation for selling shares to investors. The San Francisco-based company reported that its revenue rose more than 20 percent as its losses narrowed last year, and that it had 73 million daily users.
The prospectus kicks off a process to the stock market, with the 19-year-old company set to meet potential investors to whet their appetites for buying its shares. Reddit could go public on the New York Stock Exchange in a matter of weeks. The company was valued at more than $10 billion in a 2021 private financing.
Reddit is the last of an earlier generation of social media companies to aim for the stock market, after Facebook’s high-profile offering in 2012, Twitter’s in 2013 and Snap’s in 2017. In the years since, the social media industry has changed, facing scrutiny for misinformation, hate speech and other effects. Some of the companies have shifted directions; Facebook was renamed Meta, and Twitter was bought by Elon Musk, who took the company private in 2022 and renamed it X.
Reddit’s move is also highly anticipated after a lull in initial public offerings. Just 108 companies went public in the United States last year, roughly a quarter of the number that debuted in 2021, according to data compiled by Renaissance Capital. Some of the biggest tech offerings last year were Arm, a chip designer, and Instacart, a grocery delivery company.
“We are going public to advance our mission and become a stronger company,” Steve Huffman, Reddit’s chief executive, said in a founder’s letter included in the prospectus. “We hope going public will provide meaningful benefits to our community as well.”
