Reddit Files To Go Public, Set To Capitalize On AI Market Boom

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by Tyler Durden
Friday, Feb 23, 2024 - 02:05 PM

Reddit, the community-focused message board site with tens of millions of daily users, filed an S-1 form with the Securities and Exchange Commission on Thursday afternoon. 

The unprofitable 20-year-old social media company first filed confidentially for an IPO in the second half of 2021 but missed its shot at going public. Now, Bloomberg reports Reddit could debut on the New York Stock Exchange as soon as March. 

The S-1 filing disclosed Reddit's financial performance ahead of going public. It has 73 million daily users and over 100,000 active communities. Revenues jumped 21% last year to $804 million as the social media company continued to hemorrhage cash, losing $158.6 million in 2022 and $90.8 million in 2023.

Bloomberg previously reported Reddit has been advised to seek a valuation of at least $5 billion in an IPO. That is of the $10 billion valuation the company fetched in a private funding round in 2021. 

The S-1 filing also revealed the company appears to be riding the AI bubble:

"We believe our growing platform data will be a key element in the training of leading large language models ("LLMs") and serve as an additional monetization channel for Reddit." 

The filing showed OpenAI CEO Sam Altman owns an 8.7% stake, making him the third-largest shareholder. 

Ahead of the filing, Reuters reported Reddit signed a deal with Google to make its content available for training the search engine AI models. 

Timing the IPO in the midst of an AI bubble is risky business. 

"We are going public to advance our mission and become a stronger company," Reddit's chief executive and co-founder, Steve Huffman, wrote in the filing. 

Reddit is the last of the original social media companies to go public, after Facebook in 2021, Twitter in 2013, and Snap in 2017.