Reddit is planning an IPO and the New York Stock Exchange has won the listing, the Wall Street Journal reported.
The San Francisco-based social media company confidentially filed offering documents with the U.S. Securities and Exchange Commission in 2021, it said in a blog post at the time.
However, the plans were put on hold due to a difficult business climate and in line with the general trend of delayed IPOs in the technology sector.
According to the WSJ report, the filing is expected to be made public later this month and the NYSE will be designated as an exchange.
The listing is a coup for the NYSE in competition with Nasdaq for high-profile IPOs.
In 2023, the number of initial public offerings on U.S. exchanges rose 42 percent annually, but IPO proceeds rose more than 160 percent, driven by several large, high-profile listings, an EY report said in January.
In 2023, there were seven IPOs that raised more than $500 million, compared to just four in 2022, it said.
Technology and healthcare continued to lead the way in terms of the number of IPOs in the US. Across industries, investor preferences have remained focused on companies with greater size and profitability, EY reported.
“The market environment for IPOs has improved significantly in recent quarters: valuations have increased, volatility has decreased, inflation may fall and interest rates may begin to decline,” the advisory firm said.
Four big-name companies, including chip designer Arm Holdings and German shoe maker Birkenstock, listed shares late last year.
This year has the potential to be more normal in terms of raising money through IPOs. The most important US stock indices are at or close to record levels.
One of the biggest offerings of 2024 could be from fast fashion giant Shein, which confidentially filed for an IPO in November, according to the WSJ.
However, the China-founded, Singapore-based company is navigating a minefield of tensions between the US and China, which could impact its listing.
Another high-profile potential IPO this year could be digital payments platform Stripe.
Reddit is considering feedback from early meetings with potential investors as part of its IPO that it should consider a valuation of at least $5 billion, Bloomberg reported.
The online discussion platform wanted to capitalize on the attention it gained when its WallStreetBets forum became a hotspot for individual investors excited about GameStop and other stocks.
Founded in 2005, Reddit has raised $1.3 billion from private investors, including backing from Silicon Valley heavyweights like Sequoia Capital and Andreessen Horowitz.
Fidelity led Reddit's Series F raise in 2021, valuing it at nearly $10 billion, although it later marked down the value of its holdings in the company by 41 percent.
The company could potentially have been worth up to $15 billion in an IPO, Bloomberg reported in 2022.
Reddit CEO and co-founder Steve Huffman admitted in a discussion with users last year that the company had put its IPO plans on hold to get closer to profitability.
According to its website, Reddit had more than 70 million daily active visitors in October.
It became the darling of the so-called meme stock era after a forum on the site, WallStreetBets, rocked the stock market.
The 2021 trading frenzy, fueled largely by posts on the site, sent prices of GameStop and AMC Entertainment Holdings soaring.
Updated: February 3, 2024, 6:40 am
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