Reddit, a social media platform, confidentially files for IPO

• Reddit was valued at over $10 billion in August, following a private investment round

• In Q2 2021, Reddit earned $100 million in advertising revenue, a 192% jump Y-O-Y

Reddit announced on Wednesday that it had submitted a confidential draft registration statement to the Securities and Exchange Commission in order to go public.

The draft was not made public by the social media company. The prospective offering's number of shares to be issued and price range has yet to be defined.

The company was in a heated struggle between small-time traders and some of Wall Street's biggest players, which resulted in large gains in heavily shorted shares of businesses, including GameStop and AMC, as well as popularising the phrase "meme stocks."

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Reddit's worth had risen to $6 billion from a year earlier at the height of the trading frenzy in February. A private investment round in August of $700 million led by Fidelity Management valued the social media company at over $10 billion.

At the time of the recent investment round, the social media company stated that it had reached $100 million in advertising revenue in the second quarter of 2021, a 192 percent increase over the previous quarter.

The company, which was created in 2005 by Steve Huffman, Alexis Ohanian, and the late Internet activist Aaron Swartz, is a popular platform but has not grown much as a business as compared to other social media platforms created around the same time, such as Twitter Inc, which is valued at $52 billion, and Facebook Inc, which is valued at $1 trillion.

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In 2006, Reddit was purchased by Conde Nast Publications. The social media services remained a part of the publishing firm until 2011, when it was spun off as a separate entity. It has since secured a number of rounds of investment from venture capital firms.

Moreover, the San Francisco based company in February said it has around 52 million daily active users and over 100,000 communities.

(With inputs from Reuters)

Picture Credit: Business Insider