Self-professed ‘Front Page of the Internet’ Reddit has officially filed for an initial public offering in the US, with the debut tipped for March under ticker symbol RDDT.
In an S-1 filing with the Securities and Exchange Commission, Reddit touted its vast network of 100,000-plus communities, 73 million active daily users and one billion cumulative posts.
The S-1 did not disclose the offer pricing, though it is expected to be the biggest IPO of a social media company since Pinterest went public in 2019.
“The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock, and facilitate an orderly distribution of shares for the selling stockholders,” said Reddit.
“We intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures.
“We may also use a portion of the net proceeds to in-license, acquire, or invest in complementary technologies, assets, or intellectual property.”
Condé Nast-owner Advance Magazine Publishers was listed as the largest external shareholder with 34% of voting rights.
Chinese multinational Tencent is also a major shareholder, as is OpenAI boss Sam Altman.
Fidelity, Quiet Capital and Vy Capital all have stakes in Reddit too.
Shares allocated to mods
One of the more unique aspects of the IPO is the potential share allocation to top Reddit users and moderators.
Eligible users and moderators who joined before January 1, 2024, are potential candidates for a directed share program, with prerequisites including US residency and a minimum age of 18.
Participants must have a positive standing on the platform and cannot be current or former Reddit employees.
The program is structured into six priority tiers based on contributions, measured by ‘karma’ (the Reddit term for upvotes) for users and moderator actions for moderators.
The first tier recognises those with significant contributions to community programs, while the subsequent tiers categorise participants based on karma or moderator actions, ranging from at least 200,000 karma or 5,000 actions in Tier Two to all other eligible participants in Tier Six.
Morgan Stanley (NYSE:MS), Goldman Sachs, JPMorgan and Bank of America are among the major financial institutions underwriting the listing.