Reddit, which showed the world the power wielded by retail investors when grouped together on social media, said that it has filed for an initial public offering, in a year that has seen major tech stocks fare extremely well.
“Reddit, Inc. today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock,” from the press release published Wednesday.
The 16-year-old San Francisco-based company has not disclosed its anticipated valuation, adding that the number of shares and the proposed price range have not yet been determined. “We are in a quiet period, and for regulatory reasons, we cannot say anything further,” said the company in a tweet.
Reddit users had rallied around GameStop stocks in January in what’s considered the first online-based democratically unified stock purchase by retail investors. The stock was set to “short” by institutional investors, when Reddit users started a campaign and bought GameStop resulting in a record 24 billion shares traded on U.S. exchanges, effectively kickstarting the meme-stock trend. GameStop stock prices jumped 1,000 percent in a period of two weeks.
In a Series F round of financing led by Fidelity Investments earlier this year, Reddit raked in $410 million, increasing the value of the company to $10 billion. Steve Huffman, the company’s CEO, said during the time that this investment would give Reddit enough time on when to go public.
Based on Crunchbase data, Reddit has, until now, raised a total of $1.3 billion in funding over eight rounds.
A controversial investment by China-based Tencent in 2019 had raised eyebrows among users of the platform along with free speech advocates who believe that the Chinese Communist Party (CCP) might influence Reddit posts.
The CCP has representation in just about every major organization operating on the mainland. Analysts consider the $150 million Series D investment, at $3 billion post-money valuation, a strategic move by the communist regime to manipulate online discussion in America and elsewhere. Tencent is one of the major players involved in the CCP’s surveillance of Chinese internet.
Reddit has been moving to international markets and investing in video and consumer products. In recent years, alongside other major platforms, Reddit has been plagued with content-moderation controversies and censoring of “mis-information.” Last year, it banned the subreddit, The_Donald, featuring mostly supporters of President Donald Trump, citing violation of rules.
Currently, the ninth most popular social media app in the United States, Reddit is visited daily by around 52 million users, with 48 percent from the country.
Known as the “front page of the internet,” Reddit has over 430 million monthly active users. Around 25 percent of American adults use the platform. Other major traffic comes from the UK, Canada, Australia, and Germany. Reddit has generated around $100 million during the second quarter, 2021, in ad revenue, and expects to bring in $350 by the end of the year.