Reddit files for a US IPO | Economy

On Thursday (22), discussion forum platform Reddit filed for its initial public offering (IPO) with the North American Securities and Exchange Commission (SEC).

The company is expected to make its debut on the New York Stock Exchange (NYSE).

According to the company's prospectus (a document that collects a series of information about the company and the reason for the IPO), the offering will be Class A shares (common, with voting rights). The number of shares that will be offered has not yet been revealed.

According to the document, Morgan Stanley, Goldman Sachs, JP Morgan, Bank of America (BofA) Securities, Deutsche Bank, MUFG, and Citigroup are among the underwriters of the IPO.

The order comes nearly two decades after Reddit launched and will be a major test for the platform — which still lags behind other social networks like X (formerly Twitter) and Facebook.

In 2021, the company has already been valued at around US$10 billion (R$49.42 billion) in an investment round. However, the document does not clarify the amount the company should seek by offering its shares.

According to Reuters, Reddit has reached an agreement with Google to make its content available to train its artificial intelligence models in search engines. The contract is worth approximately US$60 million (R$296.5 million) per year.

Losses in 2022 and 2023

In the document released on Thursday (22), Reddit also reported that it recorded a loss of US$158.6 million (R$783.8 million) in 2022 and US$90.8 million (R$448.7 million) in 2023.

Despite the negative result, the company also reported a 21% growth in revenue last year, to US$804 million (R$3.97 billion) – in 2022, the platform's total revenue reached US$666.7 million (R$3.3 billion).

According to the company, the commercial area is one aspect of growth that has emerged “organically” on the platform and that “new community marketplaces have already emerged specifically for commercial purposes” within Reddit.

“We want to build this user-driven economy on Reddit by providing users and creators with the tools and incentives they need to continue creating, improving, and commerce,” the company said in the document.

Reddit's operating result, also known as EBITDA (short for earnings before interest, taxes, depreciation and amortisation), was negative at US$69.3 million (R$342.5 million) at the end of 2023. In 2022, this loss amounted to US$108.4 million (R$535.7 million Brazilian reals).

*With information from Reuters