US Reddit Preparing for IPO, Aiming to Raise 1 Trillion Won

Targeting $6.5 Billion Corporate Value
1.76 Million Shares Allocated to Subscribers and Operators
Corporate Value Plummeted from $10 Billion in 2021

U.S. online community Reddit plans to raise $748 million (approximately 983.8 billion KRW) through this year's largest initial public offering (IPO), Bloomberg reported on the 10th (local time).

According to sources, Reddit plans to sell 22 million shares at $31 to $34 per share (approximately 47,740 to 44,720 KRW). Bloomberg stated that Reddit aims for a maximum valuation of $6.5 billion (approximately 8.5495 trillion KRW) through this IPO.

Reddit plans to allocate about 1.76 million shares for users and moderators who created accounts before January 1, 2024. According to documents submitted by Reddit to the U.S. Securities and Exchange Commission (SEC), these shares are not subject to a lock-up period and can be sold from the first day of trading.

This listing is the first social media company IPO in four years since Pinterest in 2019. Founded in 2005, Reddit is the largest English-speaking online community, with over 70 million daily unique visitors as of October last year.

Reddit was initially valued at over $10 billion (approximately 13.153 trillion KRW) during its 2021 fundraising. In 2022, Bloomberg reported that Reddit could be valued up to $15 billion (approximately 19.7295 trillion KRW) in its IPO. However, following the COVID-19 pandemic, the U.S. IPO market sharply declined, leading to a decrease in Reddit's valuation. In January this year, Bloomberg reported that Reddit was considering a minimum valuation of $5 billion (approximately 6.5765 trillion KRW) in early meetings with investors.

Reddit's revenue last year was $840 million (approximately 1.1043 trillion KRW), with a net loss of $90.8 million (approximately 119.4 billion KRW). However, this is an improvement compared to 2022, when revenue was $667 million (approximately 876.9 billion KRW) with a net loss of $159 million (approximately 209 billion KRW).

Reddit's largest shareholder is Newhouse family's Advance (over 30%), followed by China's Tencent with 11%, and Sam Altman, CEO of OpenAI, holding 8.7%. If the share price is set at $34, CEO Altman's stake is expected to be worth over $400 million (approximately 525.9 billion KRW).

The IPO underwriters include Morgan Stanley, Goldman Sachs, JP Morgan Chase, and Bank of America. The stock ticker is reportedly planned as 'RDDT'.