Is Reddit an IPO?
On December 16, 2021, Reddit announced that it has confidentially filed paperwork in its first big step toward an initial public offering. Reddit's IPO won't be the biggest, but it will definitely be the loudest, given the army of traders from the sub-reddits (forums).
|Social Media||2005||San Francisco, US||$10B|
Here’s what you need to know:
- What is an IPO?
- What is Reddit?
- How to buy Reddit IPO stock? – detailed instructions
- Reddit IPO details – Reddit IPO date, price etc.
- What brokers provide access to the Reddit IPO?
What is an IPO?
When a private company or a startup first sells its shares to the general public, this process is known as an Initial Public Offering (IPO). An IPO means that a company's ownership is transferred from private ownership to public ownership. That is why the IPO process is called "going public".
Why go public? The primary benefit of going public is easier access to capital, but there are more reasons for that. If you want to learn more - here we answered frequently asked questions about IPOs in simple terms.
What is Reddit?
Reddit is a social news aggregation, web content rating and discussion website. The Company provides a platform for online communities to submit links, create content and have discussions about whatever topic that interests them. Users can post links to content on the web and then the other users can vote the posted links up or down, causing them to appear more or less prominently on the site’s home page.
Reddit business details and financials before IPO
Reddit is a popular social media platform that ranks in the top 20 most visited websites on the Internet. Every day, 52 million active users access it. Visitors can share links, vote on the most fascinating stuff, and discuss it in topical communities using the resource. More than 100,000 communities have been created on the site, covering a wide range of topics.
Reddit has a $10 billion valuation, making it a unicorn. By the time of the IPO, the valuation is expected to exceed $15 billion.
For the second quarter of 2021, the corporation had a profit of $100 million. This is nearly three times higher than the same period the previous year. The profit for the entire year of 2020 was $141,8 million. In total, the company was able to raise $1,3 billion in capital over the course of seven rounds. Tencent, a Chinese tech titan, is a major investor.
The company makes money from advertising and premium accounts. Last year, as people began spending more time online, it was also successful for Reddit: the number of daily users grew by 44%, to 52 million people. According to The Information, Reddit's revenue will double this year, to $350 million.
Reddit IPO: Potential Risks
Among other things, online marketplaces that make money from advertising have recently run into problems and lowered their revenue forecasts. The growth rate of online commerce has begun to slow, so companies are no longer increasing their advertising expenditures as much. And Apple added more negativity when it restricted its users' activity tracking in iOS. As a result, advertising relevance decreased, as did online venues' revenues.
For these and other reasons, since the beginning of the year 2021, Snap's stock is down 7%, Twitter's is down 19%, and Pinterest is down 46%.
Reddit Prospectus SEC S-1 form
Reddit's top competitors include Digg, Tumblr, Quora, 9GAG and Gizmodo.
Is Reddit Stock Publicly Traded?
No, Reddit is a privately owned company now. It belongs to founders, early investors (venture capital firms), and some employees.
Reddit's Key People
Reddit pre-IPO Investors
Reddit's top pre-IPO investors are – Sequoia Capital, Y Combinator, SV Angel, Andreessen Horowitz, Thrive Capital, Fidelity, Coatue Management, 500 Startups
In total, Reddit had raised $1.3B.
How to Participate in Reddit IPO Before Shares Hit the Public Market
In the past, Initial Public Offerings as a profitable investment type were only available to big funds or elite customers of major brokerage firms or banks and it was hard (almost impossible) for retail investors to gain access to IPOs. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market.
Luckily, technologies and marketplaces changed the rules of the game, now average investors can participate in IPOs. Brokers adjusted accordingly, making access to IPOs more affordable now.
Step-by-Step Guide How to Buy Reddit IPO Stock at Its Offer Price
- Check the Reddit IPO details. Always Do Your Own Research (DYOR) for the company that is going for IPO first.
- Find a broker. You need a broker that can provide you access to the IPO. You can use our tool attached below that helps to match investors with available IPO brokers in your area. Just click "SEE IPO BROKERS" button below to see brokers that offer access to Reddit IPO.
- Check eligibility criteria. Each broker has its own eligibility criteria, like account minimum which can vary widely
- Create trading account. For KYC you need to prepare your identity document (valid passport or driving license) and a document confirming the address of residence (utility bill). Note, this procedure may take 1-3 days as it's better to prepare your account in advance.
- Deposit your account. To participate in an IPO, your account must have available funds in the amount you send IPO application for. Note, this procedure may take 1-3 days as it's better to prepare your account in advance.
- Request Reddit shares. Assuming you meet the requirements for participating in this IPO, your next step will be to request a certain number of shares in the IPO. Note, you may not be allocated all the IPO shares you offer to buy.
- Wait for allocation. The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
Note: Many IPO purchases come with a lock-up period, usually 90 or 180 days. You will not be able to sell your shares until this period expires.
What Brokers Offer Access to Reddit IPO?
Here you can check the list of available IPO brokers that can provide access to Reddit IPO.
How to Invest After Reddit IPO at Its Opening Price
The most conservative way to buy Reddit stock would be to wait for the IPO and buy the shares on the public stock market. You can do this through the same brokers that provide access to IPOs or a trading app. Most of them have a stock trading functionality. Though, you won’t get in at the low price offered by pre-IPO.
How is Reddit going public?
Reddit announced it will go public via a traditional initial public offering, or IPO. No SPACs here.
Reddit IPO Underwriters
Reddit IPO underwriters list: Morgan Stanley and Goldman Sachs
When will be the Reddit IPO date?
IPO ETA: March 2022
What will be the Reddit IPO price?
Reddit IPO price range is not defined yet.
How many Reddit shares will be available for its IPO?
Reddit's number of shares is not defined yet.
What stock exchange will Reddit trade on?
Reddit will be traded on - the stock exchange is not known yet.
What Is the Reddit Stock Ticker?
Reddit stock ticker is not defined yet.
Reddit IPO news and updates:
- December 16, 2021 – Reddit Files Confidentially for IPO
- January 10, 2022 – Reddit Picks Morgan Stanley and Goldman Sachs for IPO