What is Reddit?

As an exciting move in the financial world, the social network Reddit is expected to conduct an initial public offering with a total valuation of 6.5 billion dollars. According to an article published by NASDAQ.com, the company attempted a public offering in 2021 and applied for an IPO confidentially.

Reuters reports that shares will be sold for between $31 and $34 per share. The IPO began on 2024/3/20 (Wednesday). The company hopes to raise at least 0.7 billion48 million dollars in the IPO.

Reddit is traded as RDDT on the New York Stock Exchange.

Reddit is a social media platform divided into approximately 100,000 forums where people discuss everything from Costco's best products to the best stocks for individual investors. In the last 3 months of 2023, Reddit had an average of 73.1 million daily active users. However, due to the lack of paid content moderators, many advertisers were frightened, and Reddit has continued to be in an unprofitable state since it was established in 2005.

Unlike many other companies, Reddit allows individual investors (including Reddit members, company executives, and employees' friends and family) to participate in the IPO, and the company has set aside 8% for share sales to non-institutional investors.

IPOs are usually reserved for the partners of the IPO underwriting company.

Also, when investing through E-Trade, Fidelity Investments, SoFi, and Robinhood, there is a possibility that IPO shares can be received.

Yahoo Finance points out that Reddit showed a strong balance sheet after the IPO, with cash and deposits close to 1.5 billion dollars, and almost no debt or liabilities. Furthermore, the company's 2023 losses are lower than before, which may indicate that profitability issues are improving. Sales in 2023 were up 20% from the previous year.

But even so, the loss last year was 91 million dollars (11 cents per dollar of sales). Losses in 2022 more than doubled to 0.1 billion 59 million dollars (24 cents per dollar).

The social media Reddit, which was listed on the NY stock market last week, is also rising today, and the stock price has doubled from the IPO price after 4 days of listing. Analysts began coverage with “neutrality” in response to a strong rise in stock prices.