Reddit plans IPO amid user concerns

Reddit, one of the most famous websites in the world, expects to reach a valuation of up to $6.4bn (£5bn) when its shares go public next week.

Reddit, the popular social media platform, is set to go public with an initial public offering (IPO) on the New York Stock Exchange. 

The company, which has never turned a profit, aims to sell 22 million shares priced between $31 and $34 each, according to a filing with the US Securities and Exchange Commission (SEC).

User Concerns Over Potential Changes

While the IPO marks a significant milestone for Reddit, many users are apprehensive about how it will impact the platform. Some fear that going public could lead to fundamental changes to the website’s community-driven nature.

Reserved Shares for Users and Moderators\

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To address user concerns and maintain community engagement, Reddit plans to reserve some shares specifically for its users and moderators. Co-founder Steve Huffman emphasized the importance of reflecting users’ sense of ownership in the company’s structure.

Transition to Public Ownership

Reddit, founded nearly 20 years ago, operates as an online forum where users can discuss various topics. Despite its popularity, the company has struggled to turn a profit, primarily relying on advertising revenue.

Additionally, a recent partnership with Google to access Reddit data for AI training indicates its diversification efforts.

Financial Performance and Valuation

Reddit has consistently recorded losses, including over $90 million last year, making its IPO a critical moment for potential investors. 

The IPO valuation falls short of its $10 billion valuation in a 2021 private fundraising round. 

Major shareholders include Advance Magazine Publishers, Tencent, Fidelity, and Sam Altman, CEO of OpenAI, the organization behind ChatGPT.