ONLINE PLATFORM REDDIT is gearing up to imminently go public on the New York Stock Exchange and hopes to raise over $500 million when doing so, new filings show.
The platform, which describes itself as the ‘front page of the internet’, is an online forum and noticeboard website where communities gather to share creative posts or publish opinions on any given topic.
Filings, issued to the stock exchange today, show the platform has up to 500 million active users online but the company, established in 2005, has yet to turn a profit from its website.
Reddit Inc, the owners of the website, have moved in recent weeks to go public on the New York Stock Exchange (NYSE), offering up over 15 million shares of the company at a cost of around $32.50 (€29.75) per share.
The NYSE, who will take the company public, has had a dormont Initial Public Offering (IPO) market since the middle of last year. The introduction of Reddit (under the listing RDDT) will be a test to how the market handles a new launch.
A date for the initial public offering of shares has yet to be set.
Reddit will be the first social media platform to go public since Pinterest did so, quite successfully, in 2019. If the owners of the platform are successful in the latest venture, it could lead to them raising around $500 million in fresh capital.
Taking in shares which might be sold by those who already hold some in the company, there is the possibility that 25 million shares could be made available to the public when launched.
The owners are also willing to give back to its half-a-billion users, who populate more than 100,000 communities, by reserving nearly two million shares for the cohort – a move which some experts have deemed unusual.
“As a community platform, Reddit is committed to providing users and moderators with an opportunity to participate in this offering,” the company said in its filing today.
Certain users and site moderators will be eligible to purchase the shares as well as the company’s board members and their families and friends.
This would not be the first time that ‘Redditors’ have gotten their hands green with cash.
A Netflix documentary released in 2022, named ‘Eat the Rich’, detailed how a community of traders on the website fought against legacy trading institutions in 2021, who were shorting Gamestop stocks, and made a boatload of money doing so.
A movie, based on the event, named ‘Dumb Money’ was also released last year and detailed the story of the ‘WallStreetBets’ subreddit, from the initial posts about the plan to the US congressional hearings after the damage was done.
The company has not been without its scandals either. Recently the site’s, largely volunteer-led, moderator base staged a protest over fees which AI and other tech developers were issuing onto users.
This was due to Reddit Inc’s CEO, Steve Huffman, being unwilling to allow companies that build AI chatbots to have free access to the site to perfect their large-language models.
“Reddit needs to be a self-sustaining business, and to do that, we can no longer subsidize commercial entities that require large-scale data use,” Huffman wrote in a Reddit post at the time.
The EU’s AI act, set to be voted on in the Parliament this week, will allow for the owners of content and websites to issue similar charges to Artificial Intelligence developers for this service.
In Ireland, the company has also previously moved to take legal action against Coimisiún na Meán, after it claimed the State’s media regulator mislabelled them as a “video sharing platform”. That case remains ongoing.
Reddit has said the company hopes to earn enough capital to improve its website and its money-making power.
Contains reporting from © AFP 2024. Comments closed due to ongoing legal proceedings.
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