Reddit plans stock market debut with potential volume of 750 million dollars

The online community Reddit is gearing up for its stock market debut and may face an Initial Public Offering (IPO) valued at up to $750 million. The San Francisco-based platform announced it will make 22 million shares available to the general public and targets a price range of $31 to $34 per share. For the platform's most dedicated users, a special allotment is reserved: about eight percent of the shares about to be traded are intended for them, and unlike other investor groups, they are not subject to any lock-up period and can thus sell their shares from the first day of trading. The public has been waiting for some time for this move from Reddit, as the company had already submitted a confidential application to the Security and Exchange Commission (SEC) two years ago and only made concrete stock market plans public in the last two weeks, including revealing an initial stock prospectus. The current price range suggests a company valuation at the start of trading of up to $6.4 billion, which includes employee stock options and restricted stocks. Taking into account only the nearly 159 million shares without these special factors, the market value could amount to up to $5.4 billion. The platform, which allows users to create and join forums based on areas of interest, reported an average of 73.1 million active users per day last quarter, with about half originating from the USA. Last year, Reddit reported an increase in revenue from $666.7 million to $804 million, while the loss decreased from $158.6 million to $90.8 million. In the usual risk disclosures, Reddit pointed out that active participation by its user community after the stock market launch could lead to significant price fluctuations. An unprecedented case already occurred in 2021 when Reddit users initiated a movement that, despite skepticism from Wall Street, led to substantial price increases in companies like GameStop through targeted investments.