Reddit Confidentially Files for IPO – Could it Become a Meme Stock?

London, UK - August 01, 2018: The buttons of Reddit, Spotify, Podcasts, WhatsApp and Music on the screen of an iPhone.
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Reddit — the social platform at the center of this year’s meme stock volatility saga — announced it had confidentially submitted paperwork to the Securities and Exchange Commission (SEC) for an Initial Public Offering (IPO).

“The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to occur after the SEC completes its review process, subject to market and other conditions,” Reddit said in a blog post on its website. “We are in a quiet period, and for regulatory reasons, we cannot say anything further.”

Peter Cohan, a senior lecturer at Babson College and author of “Goliath Strikes Back,” told GOBankingRates that since it is a confidential filing,  it’s hard to know whether the company is growing fast or making money.

“At the same time, I could see it becoming a meme stock since it hosts WallStreetBets which is the ultimate meme incubator,” Cohan added.

Reddit made headlines earlier this year, as retail traders on the subreddit group WallStreetBets, who were intent on taking down hedge-fund short-sellers by buying shares of stocks that didn’t seem to have much of a chance of success, sent stocks, including GameStop, AMC Entertainment and Bed Bath & Beyond, soaring (and then crashing). In turn, the market volatility brought the attention-and-ire- of regulators.

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In August, the company said in a blog post it would raise “$700 million in Series F funding, led by Fidelity Management and Research Company LLC. and including other existing investors, at a post-money valuation of over $10 billion.”

“This year Reddit marked its first $100 million advertising revenue quarter (Q2 2021), representing a 192 percent increase compared to the same period last year. And, we are investing in our products and diversifying the Reddit experience to include new ways for communities to connect through video and audio, the company said in August.

And in February, Reddit said it had raised more than $250 million in funding — doubling its valuation — and that it was “readying to double the number of Reddit employees this year.”

“As we reflect on Reddit’s 16th year, we are struck by how much has changed and also what has endured. Time and again, we have seen the power of community and connection alongside the growth and evolution of those communities and the humans behind them,” the company said in a post in February. “We decided that now was the right opportunity to make strategic investments in Reddit including video, advertising, consumer products, and expanding into international markets.”

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And in December 2020, the company acquired the short-form video platform Dubsmash to bring “highly polished video creation tools to our platform and encourage under-represented creators to find a home on Reddit,” according to a company announcement.

The Wall Street Journal reports that Reddit’s market debut will come after a year for IPOs like no other, as more than 900 companies have gone public in 2021, raising nearly $300 billion in 2021, including electric vehicle maker Rivian Automotive Inc., dating app Bumble Inc. and mobile-videogame maker Playtika Holding Corp

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