Reddit prepares for stock market listing

Reddit's role as a forum where users appear under pseudonyms, rather than requiring 'real' identities, has set it apart from other social media sites. Photo / 123RF

Reddit, the controversial discussion forum that rose to prominence as a haven for free speech online, has begun the process for a stock market listing that could see it complete a transition to the corporate mainstream.

The San Francisco-based company said late on Wednesday that it had lodged a confidential filing for an initial public offering with the Securities and Exchange Commission.

The Jumpstart Our Business Startups Act of 2012 let companies file to go public in the US without publishing their prospectus until late in the process, provided their latest annual revenues were less than US$1 billion ($1.4b).

Reddit said it had yet to determine how many shares it would sell, or a likely price range for the stock. It puts its valuation at US$10b at the time of its last fundraising round, in August, up from the US$6b the company said it was valued at six months before.

A Reddit IPO has been hotly anticipated in recent months. The platform's role as a forum where users appear under pseudonyms, rather than requiring "real" identities, has set it apart from other social media sites.

This year, Reddit's r/WallStreetBets message board became a force on Wall Street through the meme stock frenzy as individual investors used the forum to co-ordinate their buying and drive up the prices of several stocks, such as games retailer GameStop.

Reddit's founders have said that the "anything goes" ethos was never their intention when creating the website and that its role as a haven for free speech arose by accident.

In recent years, the company has been bent on policing its forums more actively and building an advertising business in preparation for a move to the public markets.

Reddit has had a long and tortuous path to Wall Street. It was founded in 2005, a year after Facebook, and was bought by Condé Nast a year later for US$10 million.

It was later spun out again as a separate company and went through a string of chief executives before co-founder Steve Huffman returned to run Reddit and prepare it for a listing.

Written by: Richard Waters

© Financial Times