Reddit IPO: Coming in Big?05.10.2021by Philippe Orphanides
Reddit co-founder and CEO Steve Huffman confirmed rumors about an upcoming Reddit IPO but did not give any date. Last month, the online forum was valued at USD 10bn.
With the looks of a common forum page with thematical discussion boards, the company is expected to break through USD 15bn in valuation post-IPO.
How did that exactly happen? One word: Trading.
The forum’s numbers went through the roof at the beginning of this year amidst the GameStop saga. Many of its users set up discussion boards with trading advice, racking up extra million users daily at the time with retail investors invading the r/WallStreetBets board for trading tips.
Reddit is the 14th most visited website in the world with 53 million daily active users and USD100 million in annual ad revenue. Hosting more than 100,000 communities, its users share their thoughts on a range of topics, sometimes controversial.
The success of the platform is mainly due to the anonymity of the posts and the fact that they are submitted to votes by the discussion board participants, the most upvoted posts appearing first on the page.
According to Reddit COO Jennifer Wong, the platform has the opportunity to expand more globally. Half of its users are outside the US, but virtually all of its revenue is from domestic advertising. A successful IPO could change these numbers with the expected pressure for increasing ad revenue from potential future shareholders.
While the markets keep a close watch on any signs of an imminent Reddit IPO, start trading CFDs on stocks that hit big IPOs and grow globally like Pinterest, Airbnb, or Alibaba.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.