Reddit’s IPO Filing Includes Shares Reserved for Users

Reddit, the popular social media platform known for its diverse communities and user-generated content, has officially submitted its initial public offering (IPO) prospectus to the Securities and Exchange Commission (SEC). This move comes after years of speculation and anticipation regarding when the company would go public.

In its IPO filing, Reddit disclosed that it is seeking to list its shares on the New York Stock Exchange under the ticker symbol “RDDT.” The company reported impressive financial figures, with revenue totaling $804 million for the previous year, representing a significant increase from $666 million in the preceding year. However, Reddit also reported a net loss of $90.8 million, an improvement from the $158.6 million loss reported in the previous year.

One of the most notable aspects of Reddit’s IPO is its unique approach to shareholder allocation. The company has decided to reserve an unspecified number of shares for its most loyal users and moderators, as a way to recognize their contributions to the platform. This initiative, known as the “directed share program,” allows eligible community members to purchase shares at the same price as institutional investors, providing them with a sense of ownership in the company’s future.

To implement the directed share program, Reddit is reaching out to eligible community members and inviting them to pre-register for the program. In a message to users, the company expressed gratitude for their role in shaping Reddit’s success, stating, “Because you have helped make Reddit what it is today, you now have the opportunity to become Reddit owners.”

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit has grown to become one of the largest social media platforms in the world, boasting 73 million average daily active unique users and hosting more than 100,000 active communities. The platform’s user base has been instrumental in driving its growth and shaping its culture, making the decision to involve them in the IPO process particularly significant.

Reddit’s IPO filing comes after months of speculation and rumors about the company’s plans to go public. Reports initially suggested that Reddit was aiming to launch its IPO in March, following a confidential filing in December 2021. However, the company’s plans were delayed, likely due to market conditions and other factors.

In addition to its IPO filing, Reddit’s disclosure revealed that OpenAI CEO Sam Altman is the company’s third-largest shareholder, with entities affiliated with him owning 8.7% of Reddit shares. Tencent and Advance Magazine publishers are the two largest shareholders, underscoring the diverse ownership structure of the company.

Overall, Reddit’s IPO filing marks a significant milestone in the company’s history and could have far-reaching implications for the future of social media IPOs. The decision to reserve shares for its users reflects Reddit’s commitment to its community and could set a new standard for user engagement in IPOs.