Popular social platform Reddit will soon begin trading on the New York Stock Exchange under the symbol RDDT. The company filed its S-1 registration statement with the U.S. Exchange and Securities Commission (SEC) detailing its financial condition and business objectives ahead of its IPO.
According to its S-1 document, the company has revenue of $804 million in 2023. While it was stated that the majority of these revenues were earned through advertisements, the company completed 2023 with a net loss of $ 90.8 million.
In an unexpected move, Reddit is offering a select number of its “top” users, including moderators and those with high karma scores, the opportunity to purchase shares in the IPO. This is usually a privilege granted to professional investors who want to buy the stock at a theoretically lower price before the IPO launches.
In an unusual twist, Reddit is offering an unspecified number of its top users, including moderators and those with high karma scores, the chance to buy shares in its IPO. This is a privilege usually granted to professional investors who want to buy the stock at a theoretically lower price before anyone else buys it on the public market.
According to the information provided by the company; Selected users and moderators who contribute significantly to the community program and are selected by the company will be able to receive their share through a tiered system. After the first stage, people with a karma score of at least 2000 and who have performed at least 5000 moderator actions will be invited to purchase shares.
According to the filing submitted to the SEC, the platform’s weekly active users are 267.5 million. There are a total of 1 billion posts in the service, which has more than 100 thousand active communities. The company said it reserved 1.3 million shares of its Class A common stock “to fund community-engaged programs that empower Redditors to bring their ideas to life.”
Reddit lists data licensing and model training as part of its monetization strategy. The data supply agreement made with Google for artificial intelligence training is also considered as a step taken within the framework of this monetization strategy. Currently, 98 percent of the company’s revenue comes from advertising.
Steve Huffman, the company’s CEO, said: “I have never been as excited about the future of Reddit as I am now. We have many opportunities to grow both the platform and the business; the second through advertising, monetization of commerce on the platform and licensing of data… As the world becomes increasingly data-driven, we offer people- and experience-focused solutions. “We expect our data advantage and intellectual property to continue to be an important element in the education of future LLMs.”
Reddit had previously applied for an IPO
Reddit also applied for an IPO in December 2021, when the company’s value was approximately $10 billion. But an unstable IPO market led the company to postpone its plans.