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posted by janrinok on Thursday February 29, @05:35AM   Printer-friendly

Growing but unprofitable, Reddit could kick off 2024's IPO cycle:

Social media giant Reddit filed to go public today [22 Feb 2024]. Its long-awaited S-1 filing will see it approach the public markets potentially at the head of a long column of richly valued technology startups and private companies that need to find an exit this year.

[...] The company's got a long and tangled history. It was sold in its infancy, only to be later spun back out. Today Reddit approaches the public markets with more than $800 million worth of revenue in 2023, up from $666.7 million in 2022.

However, the company remains unprofitable on both a GAAP and adjusted basis, and continues to consume cash to fund its operations. Scale has not yet solved the profitability question for Reddit, which could limit its potential valuation when it does list its shares.

In 2022, Reddit generated a net loss of $158.6 million and had an adjusted EBITDA of negative $108.4 million. In 2023, those figures improved to a $90.8 million net loss and $69.3 million worth of negative adjusted EBITDA. The company's free cash flow improved from –$100.3 million to –$84.8 million over the same timeframe.

The company may be making progress toward stemming the red ink that is missed in its annual figures. In the final quarter of 2023, Reddit not only posted what was at least a local maximum in revenue terms — $249.8 million — but also a net profit of $18.5 million. While the GAAP profit is notable for the fourth quarter, the company's free cash flow was still negative in the period, ending the three-month period at –$22 million.

Reddit raised more than $1 billion while private, according to Crunchbase data. That figure includes a massive $410 million Series F raised in 2021 and a smaller $368 million Series E raised earlier the same year. The Series E pushed Reddit's valuation to $6.4 billion, while its Series F took it to a roughly $10 billion valuation.

Both of those bubble-era valuations will be tested in Reddit's now quickly forthcoming IPO. But the company's debut will be more than a test for certain private-market startup valuations. Reddit is reportedly trying something novel in its own flotation.

In what is broadly viewed as an unorthodox move, Reddit reportedly plans to reserve an undetermined number of shares for 75,000 of its users, according to the Wall Street Journal, which cited people familiar with the matter. Those users will be given the chance to scoop up shares of Reddit at its IPO price before the stock even begins trading — something typically reserved only for large investors.


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  • (Score: 4, Insightful) by Anonymous Coward on Thursday February 29, @06:45AM (2 children)

    by Anonymous Coward on Thursday February 29, @06:45AM (#1346765)

    fast

    • (Score: 4, Touché) by Freeman on Thursday February 29, @02:25PM

      by Freeman (732) on Thursday February 29, @02:25PM (#1346799) Journal

      You act like it wasn't already there.

      --
      Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
    • (Score: 0, Flamebait) by Anonymous Coward on Friday March 01, @11:41PM

      by Anonymous Coward on Friday March 01, @11:41PM (#1347025)

      There are an increasing amount of (presumably) Ai generated clickbaity articles. It's a shame, reddit is/was one of the only sites not chewed up and spat out by frothing right wing nutjobs.

  • (Score: 4, Informative) by Anonymous Coward on Thursday February 29, @07:28AM (7 children)

    by Anonymous Coward on Thursday February 29, @07:28AM (#1346767)

    Participating in Reddit’s Initial Public Offering (IPO)

    from reddit[A] sent 13 hours ago

    Hello,

    TL;DR: – you’re invited to a special program that lets redditors purchase stock at the same price as institutional investors when we IPO. Details about eligibility and next steps follow. This (long, dense) message has all the info we can provide due to legal restrictions.

    As you may have heard, Reddit has taken steps toward becoming a publicly traded company with the initial public filing of our registration statement with the U.S. Securities and Exchange Commission on February 22, 2024. Yes, it’s happening.

    And because you have helped make Reddit what it is today, you now have the opportunity to become Reddit owners at the same price as institutional investors.

    We’re offering a Directed Share Program (“DSP”) that invites eligible users and moderators who have contributed to Reddit to participate in our initial public offering (“IPO”). (Including you!)

    Program Requirements
    While being selected to pre-register is the first step, there are certain legal and regulatory requirements to participate in the DSP that are outside of Reddit’s control. Bear with us here…

    To be eligible for the DSP, you must:

    Be a current U.S. resident;
    You will be asked to provide the DSP Administrator a valid social security or permanent resident number, along with other personal information. Reddit will not have access to this data.
    Please note that U.S. residents using a VPN may face application limitations if the VPN locates them in certain non-U.S. jurisdictions.
    Be at least 18 years old;
    Provide your full legal name and an email address;
    Not be a current or former Reddit employee (FTE).
    When the DSP launches (a few weeks after pre-registration ends), individuals who have been confirmed for the program will be contacted by our external DSP Administrator. You will then be asked to provide additional information securely to the DSP Administrator to confirm your eligibility.

    How to pre-register
    The number of people who can participate in the DSP is limited; we will offer this opportunity to as many redditors as we are able to accommodate. If capacity is reached before the deadline, you will be added to the waitlist. Based on demand, we may also limit the number of shares available.

    If you are interested in being part of Reddit’s DSP, please go to https://reddit.com/dsp [reddit.com] on desktop to complete the pre-registration form. If you are one of the confirmed participants, we will follow up with an email with more details in the coming weeks. You can also refer to the Frequently Asked Questions for more information. Due to regulatory restrictions (yeah… we know…), we are not able to respond to further inquiries or questions.

    Pre-registering does not guarantee that you will be invited or able to participate in the DSP; it also does not obligate you to purchase shares.

    As with any investment opportunity, you should make an individual decision based on your own personal circumstances and risk tolerance. Therefore, we urge you to review the preliminary prospectus, when available, before deciding whether to invest in Reddit.

    The deadline for pre-registering for the DSP is March 5, 2024. If capacity is reached before the deadline, you will be added to the waitlist.

    What happens next?
    While there won’t be a confirmation email immediately after you pre-register, everyone who pre-registers will receive an email in the coming weeks from “noreply@redditmail.com” telling them whether they can proceed with the next steps for the DSP.

    This is an automated message (beep, boop, beep) and does not receive replies. Please refer to the FAQ for more information. Per our lawyercats, we are not able to respond to further inquiries or questions.

    Prospectus and Important Disclosures

    The offering will be made only by means of a prospectus. When available, a copy of the preliminary prospectus related to the offering may be obtained from: Morgan Stanley & Co. LLC, Prospectus Department, 180 Varick Street, New York, New York 10014, or email: prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, Attention:c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204, or email: prospectus-eq_fi@jpmorgan.com; and BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, telephone: 1-800-294-1322, or email: dg.prospectus_requests@bofa.com.

    A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This notification shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

    No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the notice of its acceptance given after the effective date. An indication of interest in response to this notification will involve no obligation or commitment of any kind.

    • (Score: 3, Funny) by c0lo on Thursday February 29, @11:04AM (5 children)

      by c0lo (156) Subscriber Badge on Thursday February 29, @11:04AM (#1346779) Journal

      When the most dedicated Reddit users don't have disposable money because they dedicated their disposable time to Reddit for free.

      Fortunately, this not gonna happen to soylentils :large-grin:

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
      • (Score: 2, Funny) by khallow on Thursday February 29, @01:19PM (3 children)

        by khallow (3766) Subscriber Badge on Thursday February 29, @01:19PM (#1346792) Journal

        Fortunately, this not gonna happen to soylentils :large-grin:

        With the high concentration of thought leaders and influencers on this platform, the wheels are in motion. In! Motion!

        • (Score: 3, Funny) by c0lo on Thursday February 29, @02:25PM (2 children)

          by c0lo (156) Subscriber Badge on Thursday February 29, @02:25PM (#1346798) Journal

          Yeah, naaah, mate. While the quality of the "thought leaders and influencers" is indubitable, we are too few for a merchandise that could qualify S/N in the IPO league.
          The motion that you think you see in those wheels is a Brownian motion.

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
          • (Score: 2, Informative) by khallow on Thursday February 29, @06:05PM (1 child)

            by khallow (3766) Subscriber Badge on Thursday February 29, @06:05PM (#1346819) Journal
            Did I not use enough exclamation marks!!!!1!?
            • (Score: 4, Touché) by c0lo on Thursday February 29, @10:28PM

              by c0lo (156) Subscriber Badge on Thursday February 29, @10:28PM (#1346859) Journal

              Like... you wanted to go IPO with just a couple of exclamation marks sprinkled between other letters?!?!?! See, that's another example of why S/N isn't ready.

              --
              https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
      • (Score: 2) by Freeman on Thursday February 29, @02:28PM

        by Freeman (732) on Thursday February 29, @02:28PM (#1346800) Journal

        Nah, Soylentils give their time and their money to the site. Then again, perhaps Redditors do as well. We need more monetization options! Give us microtransactions! So we can have our stickers and badges in our tagline!

        --
        Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
    • (Score: 3, Interesting) by JoeMerchant on Thursday February 29, @12:46PM

      by JoeMerchant (3937) on Thursday February 29, @12:46PM (#1346787)

      I got one of those, I haven't gotten a followup yet. Only 75,000 users isn't a very large percentage. We'll see if 100K+ comment karma and running a small but active sub-reddit for 10 years does anything to get a user onto the "privileged" list.

      --
      🌻🌻 [google.com]
  • (Score: 3, Funny) by Opportunist on Thursday February 29, @09:22AM (4 children)

    by Opportunist (5545) on Thursday February 29, @09:22AM (#1346769)

    Someone might buy them out just to turn that crap off finally.

    • (Score: 5, Funny) by pkrasimirov on Thursday February 29, @11:39AM (3 children)

      by pkrasimirov (3358) Subscriber Badge on Thursday February 29, @11:39AM (#1346780)

      And rename them to Y.

      • (Score: 3, Funny) by Freeman on Thursday February 29, @02:32PM (2 children)

        by Freeman (732) on Thursday February 29, @02:32PM (#1346802) Journal

        Nope, that would be sexist. As we all know Y is the male chromosome, while X is the indeterminate chromosome and therefore superior. Thus, naming something only X is inclusive, while naming something only Y is exclusive and must be treated as the rubbish that it is. Nevermind that XX and XY are actually separate things and without the extra X or additional Y you have nothing.

        --
        Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
        • (Score: 5, Funny) by bzipitidoo on Thursday February 29, @04:41PM

          by bzipitidoo (4388) on Thursday February 29, @04:41PM (#1346815) Journal

          I was gonna ask Y or Y not, but you mansplained it so well! Love you, bye bye!

        • (Score: 2) by Opportunist on Friday March 01, @10:34AM

          by Opportunist (5545) on Friday March 01, @10:34AM (#1346943)

          And Z is out because it supports Russia's war in Ukraine.

          Is there a non-tainted letter in the alphabet left?

  • (Score: 3, Funny) by The Vocal Minority on Friday March 01, @04:52AM

    by The Vocal Minority (2765) on Friday March 01, @04:52AM (#1346913) Journal

    Are the Reddit Files going to be more scandalous than the Twitter Files?

    Good work brain!

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