Reddit, the popular online discussion platform, has officially filed its paperwork to go public on the New York Stock Exchange (NYSE). In an unconventional strategy, Reddit also plans to allow some of its most active users and moderators to invest in the initial public offering ahead of the general public.

The company revealed its IPO plans in an S-1 registration statement submitted on Thursday to the Securities and Exchange Commission. Reddit said it hopes to raise up to $15 billion by selling shares under the stock ticker symbol “RDDT.”

Founded in 2005, Reddit has grown into one of the most visited websites in the world, with over 50 million daily active users. The site is structured around “subreddits” – topic-specific communities moderated by volunteers.

Financial details

According to the filing, Reddit generated $804 million in revenue in 2023, with nearly all of that coming from advertising. However, heavy investments in hiring and infrastructure caused the company to operate at a net loss of $90.8 million last year.

Reddit will use the cash raised from the IPO to continue expanding its workforce, develop new products and features, and grow its user base internationally.

Unusual offer to users

In a highly unconventional move, Reddit plans to allocate IPO shares to some of its top content creators and moderators. The company says this is a way to recognize the contributions of some of our most active and engaged community members.

The share allocation will be based on a tiered system determined by each user’s karma points and moderation activity. For example, users with over 200,000 karma points and at least 5,000 moderator actions will be eligible to buy shares at the IPO price.

This privileged access is almost always reserved for large institutional investors and venture capital firms, not individual users. While creative, the move could spark backlash from investors who may get shut out of shares.

Growth plans

In his letter to investors, Reddit CEO Steve Huffman wrote, “We have many opportunities to grow both the platform and the business.”

He highlighted opportunities in advertising, e-commerce, and data licensing. Reddit recently signed a reported $60 million annual deal to provide training data to Google’s AI systems.

“As the world becomes increasingly data-driven, we offer solutions that are human- and experience-focused,” wrote Huffman. “We expect our data advantage and intellectual property to continue to be a key element in the training of future [AI] models.”

When Reddit first filed confidential IPO documents in late 2021, the company was valued at around $10 billion. But an unstable market delayed those plans. Now, Reddit is finally ready to let the public invest as it continues on its growth trajectory. The company’s unconventional IPO approach mirrors its unique standing as a user-generated, community-driven platform.