The social news platform is looking to hire investment bankers and lawyers for an initial public offering, sources told Reuters.
By the time that a Reddit IPO happens, management hopes the company will be valued at more than $15 billion. A private fundraising round in August valued Reddit at $10 billion.
The timing and size of the Reddit IPO are subject to market conditions, the sources said. Reddit declined to comment to Reuters.
Founded in 2005, Reddit trailed Facebook (FB) and Twitter (TWTR) in popularity for years. But it shot to fame early this year as enthusiastic retail investors mobilized on its online forum to target highly shorted stocks.
As of last October, Reddit had about 52 million users and more than 100,000 communities or “sub-reddits” on its platform. It posted $100 million in advertising revenue in the second quarter, a massive jump from a year ago.
Reddit’s biggest backers include Fidelity Investments and China’s Tencent Holdings (TCEHY).
Meme Stocks Fuel Reddit IPO
GameStop, a struggling mall-based retailer of video games, ignited the whole Reddit-fueled meme stocks frenzy. GameStop stock gained more than 1,000% in the first eight months of 2021, then cooled off.
AMC stock is also well off highs seen earlier this year.
GME stock dipped 0.7% on the stock market today. AMC was off 0.6%. Support.com added 0.7%.
A Reddit IPO would be the latest in emerging stocks for millennials and Gen Zers looking to tackle investing.
In July, online brokerage Robinhood Markets (HOOD), which popularized no-fee stock trades and became the gateway for meme stocks mania, staged its own IPO.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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