Reddit, the crusader (or bad boy, depending on the perspective) of meme stocks, has decided to go public. The social media platform that rocked multiple hedge funds, and made many millionaires, could be hoping to take its current valuation of $10 billion, to $15 billion.
Reddit has around 52 million Daily Active Users (DAU). Needless to say, this is nowhere in the league of Facebook, WhatsApp, Twitter. However, what it does have, is of far greater value to many day traders and hedge fund managers.
The forum-style platform, with more than 100,000 active 'sub-Reddits', recently became the hottest destination for many day traders during this year's meme stock frenzy. The hottest of them all was the WallStreetBets thread, which drove stocks of GameStop to the stratosphere, and popularized the dialogue, “Hold the line” across social media platforms.
Social media platform Reddit files to go public https://t.co/yToC01dhxD— BBC News (World) (@BBCWorld) December 16, 2021
Incidentally, owing to meme stocks, Reddit's value doubled to $6 billion from a year earlier. In August, the platform raised $700 million, which further drove its valuation to $10 billion. Reddit currently earns mainly through ads, and has reportedly claimed that it made “$100 million in ad revenue for the second quarter of 2021”. This is almost a 200 percent jump from the same quarter last year.
Reddit is highly interested in scaling up. The platform confirmed it intends to double its staff by the end of 2021. This means it'll have around 1,400 employees. Its ambitions could easily be fulfilled with a successful IPO.
The platform hasn’t disclosed how many shares it will offer. Moreover, there’s no clarity about the price band for Reddit shares. In fact, Reddit has filed a confidential S-1 with the Securities and Exchange Commission. So everything is shrouded in mystery, as of now.