Online platform Reddit pushes ahead with stock market plans

The online platform Reddit is taking the next step on its way to the stock exchange. The San Francisco-based company published its share prospectus on Thursday - two years after initially filing confidentially with the SEC.

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Among other things, it reveals that Reddit was able to increase revenue and reduce losses last year.

Reddit allows users to join online groups according to their interests. In the past quarter, the platform had an average of 73.1 million users per day. Around half of these came from the USA. Registered US users spent an average of 25 to 30 minutes per day on Reddit, according to the report.

Many users exclusively on the platform

With a view to the advertising industry, the service emphasizes that many of them are also not found on other online services. Almost a third of US Reddit users are not active on Facebook, 73% are not on Snapchat and 53% are not on Elon Musk's Twitter successor X.

Reddit will also give some particularly active users the opportunity to buy shares in the IPO - which is unusual. Unlike many other investors, there will be no obligation for them to hold their shares for a certain period of time before selling them. In the current version of the IPO prospectus, there was no indication of what proportion of the shares available for sale will go to users.

Share allocation according to activity level

As far as the procedure is concerned, it is known that some users and moderators of Reddit's online groups will be offered the opportunity to participate in the IPO. The shares will then be allocated according to the so-called "karma" rating, which reflects the reputation and activity of users on the platform.

Reddit also noted in the usual risk warnings in the prospectus that user participation could lead to major price fluctuations after the IPO. Users on the platform formed the movement in 2021 that invested in shares of some of the companies questioned by Wall Street, such as the video game retail chain Gamestop, causing share prices to rise.

Reddit increased its turnover last year from 666.7 to 804 million dollars. The loss fell from 158.6 million dollars to 90.8 million dollars. Reddit did not initially provide any information on the targeted valuation or the volume of the share placement. According to information from the financial service Bloomberg, Reddit was recommended a valuation of around five billion dollars. (SDA)

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