Reddit Plans Initial Public Offering on New York Stock Exchange: Wall Street Journal Reports
Reddit, the San Francisco-based social media company, is preparing for an initial public offering (IPO), with the New York Stock Exchange (NYSE) winning the coveted listing, according to a report by the Wall Street Journal (WSJ). After confidentially filing offering paperwork with the US Securities and Exchange Commission in 2021, the company put its IPO plans on hold due to challenging market conditions. However, it is now expected to unveil the filing later this month, naming NYSE as its exchange.
The decision to list on NYSE is a major win for the exchange in its competition with Nasdaq for high-profile IPOs. The number of IPOs on US exchanges increased by 42% in 2023, and IPO proceeds grew by over 160%, driven by several large high-profile listings, according to a report by EY. Technology and healthcare companies continued to lead the IPO deal count, with investor preferences gravitating towards companies with greater scale and profitability.
In a more favorable market backdrop for IPOs, with increased valuations and decreased volatility, Reddit is looking to capitalize on its recent attention and growth. The company gained significant traction when its WallStreetBets forum became a hot spot for individual investors rallying around stocks like GameStop. With over 70 million daily active unique visitors, Reddit has raised $1.3 billion from private investors, including support from Silicon Valley heavyweights Sequoia Capital and Andreessen Horowitz.
Major IPOs in 2023 Drive Growth on US Exchanges: EY Report
According to a report by EY, the number of IPOs on US exchanges increased by 42% in 2023, with IPO proceeds growing over 160% compared to the previous year. The growth was driven by several large high-profile listings, including chip-designer Arm Holdings and German shoemaker Birkenstock. Technology and healthcare companies continued to dominate the IPO deal count, with investors gravitating towards companies with greater scale and profitability.
The market backdrop for IPOs has significantly improved over the past few quarters, with increased valuations, decreased volatility, and the potential for declining interest rates. This positive environment has set the stage for a potentially more normal year in terms of how much money is raised by IPOs. Major US stock indexes are trading at or near record highs, providing a favorable climate for new public offerings.
Shein and Stripe: Potential High-Profile IPOs in 2024
Fast fashion giant Shein and digital payments platform Stripe are among the potential high-profile IPOs that could take place in 2024. Shein, which filed confidentially for an IPO in November, has the potential to be one of the biggest offerings of the year. However, as a China-founded, Singapore-based company, it must navigate the complexities of US-China tensions, which could impact its listing.
Stripe is also being closely watched as a potential IPO candidate this year. The online payment platform has been growing steadily and is considered a major player in the fintech industry. Reddit is considering feedback from early meetings with investors, suggesting the company should consider a valuation of at least $5 billion for its IPO. These potential IPOs highlight the continued interest and demand for high-growth companies in the tech sector.
Reddit’s Journey Towards IPO: From Stalled Plans to Market Dominance
Founded in 2005, Reddit has experienced a remarkable journey towards its IPO plans. The online discussion platform gained significant attention during the meme-stock era when its WallStreetBets forum played a pivotal role in influencing the stock market. The trading frenzy, driven by posts on Reddit, caused extreme price fluctuations for stocks like GameStop and AMC Entertainment Holdings.
Despite its early success, Reddit faced challenges along the way. The company’s IPO plans were put on hold as it aimed to move closer to profitability. However, Reddit remains a powerful player in the social media landscape, boasting over 70 million daily active unique visitors as of October. With its IPO filing expected later this month, Reddit aims to leverage its recent growth and attention to secure a successful public offering.
In conclusion, Reddit’s upcoming IPO on the New York Stock Exchange marks a significant milestone for the company and the exchange. The IPO reflects the continued growth and interest in the tech sector, with high-profile companies like Shein and Stripe also potentially going public in 2024. The IPO market in the US has experienced significant growth, driven by large high-profile listings in sectors such as technology and healthcare. With a more favorable market backdrop for IPOs, Reddit aims to capitalize on its recent popularity and attention, solidifying its position as a dominant player in the social media landscape.
Analyst comment
Positive news: Reddit Plans Initial Public Offering on New York Stock Exchange: Wall Street Journal Reports
Short Analyst Statement: With a more favorable market backdrop for IPOs and increased valuations, Reddit aims to capitalize on its recent attention and growth, solidifying its position as a dominant player in the social media landscape.
