Reddit to Go Public with March IPO

Social media platform Reddit is set to launch its initial public offering (IPO) in March, marking the first IPO of a major social media company since Pinterest's debut in 2019. The decision comes after over three years of contemplation, with Reddit and its counterparts facing fierce competition for advertising revenue from platforms like TikTok and Facebook.

Valued at approximately US$10 billion in a 2021 funding round, Reddit filed confidentially for its IPO in December 2021. The company aims to initiate its public filing in late February, with the IPO expected to be finalized by the end of March, according to Reuters. Reddit plans to sell about 10% of its shares in the IPO, and the specific valuation it will pursue will be decided closer to the listing date, as disclosed by sources.

Last year, Reddit announced its decision to charge companies for access to its application programming interface (API), a tool utilized by technology companies for training large-language models in artificial intelligence. This decision sparked discontent among some users who heavily rely on third-party apps to access Reddit.

However, Reddit users have expressed dissatisfaction, with some comments on threads discussing the IPO conveying sentiments like “it was good while it lasted” and fears about an intention to increase ad revenue. 

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Over the past year, major social media stocks experienced a resurgence, primarily driven by a rally in technology stocks amid peaking interest rates. Meta Platforms, the operator of Facebook, saw its shares more than triple in value over the past 12 months, while Snap's shares rose by 60% during the same period.

In terms of site traffic, Reddit users in Mexico represent 1.77%, accounting for 96 million daily visits. US users contribute 42.95% of the traffic, with 2.3 billion daily visits.