Reddit publicly files IPO papers detailing data licensing plans, plans to sell more ads
Reddit, the social media platform home to AMAs, Wall Street Bets and thousands of other online communities, filed its IPO registration statement publicly on Thursday, detailing its plans to further ramp up advertising, data sales and analytics. A new user-centric economy.
Founded in 2005, the company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” The filing did not disclose the number of shares to be offered or the potential price. Morgan Stanley, Goldman Sachs, JPMorgan and BofA Securities are the primary book managers.
Reddit has confidentially filed a draft registration statement for its proposed initial public offering of 2021.
Reddit also said it would give a portion of the IPO shares to users and moderators based on their reputation and contributions to the platform. Eligible participants must be 18 years of age or older, reside in the United States, and have an account on or before January 1.
“We want that sense of ownership to be reflected in actual ownership,” co-founder and CEO Steve Huffman said in Reddit’s IPO filing. In other words, we want our users to become our owners.” “Becoming a public enterprise makes this possible. With this in mind, we are excited to invite Reddit contributors and moderators to join our investors in purchasing shares in the IPO.”
The company’s public debut comes amid a potential trail of IPO markets this year, with Reddit taking on Meta Platforms Inc. It is attempting to compete with much larger competitors such as META.
And TikTok. Meanwhile, some digital media outlets are waiting for a bigger recovery in the digital advertising market.
Reddit warned in its IPO prospectus that user engagement could come and go depending on large-scale cultural events, such as a pandemic or Russia’s invasion of Ukraine. And it cited the possibility of competitors copying its features as a potential risk.
The company posted sales of $804 million last year, up 20.5% from the previous year. But you are losing money. Last year’s net loss amounted to $90.8 million.
Despite this, the company said it recorded more than 500 million visitors in December. Reddit said it averaged 73.1 million daily active unique users in the quarter ended Dec. 31, or users who visit at least once every 24 hours. And in its prospectus, Reddit sought to position itself as a large-scale repository for human experience and interaction.
“Whatever people are going through or going through, it’s on Reddit,” Huffman said in the filing.
He said Reddit is developing more ways for users to make money on the platform. The filing highlighted a move that would allow users to make money by creating avatars, offering photo editing services, selling watches and commissioning artwork. And it said it plans to offer more developer tools and increase ways for users to “incentivize and reward the creation of high-quality content by recognizing contributors with real money.”
Reddit said cutting avatar creators’ income and building a user economy “will allow us to grow new revenue streams beyond advertising.”
Similar efforts have not always been effective. When HAS of Hasbro Inc.,
The Wizards of the Coast division, which oversees the role-playing game Dungeons & Dragons, proposed paying royalties to game developers who use D&D infrastructure to generate significant revenue, but the effort was halted last year after protests from creators. It backfired.
Reddit also wants to find ways to make the ads that appear on the site more noticeable, AI-powered, and more accurate. Along with existing ads in the home feed, it said it wants to offer more video ads and ads in new places like comment threads and search pages.
Reddit also said it is “in the early stages of allowing third parties licensed access to search, analyze, and display historical and real-time data on our platform.” It said customers could pay for a real-time data feed of anonymous public discussions on Reddit. The filing also stated that Reddit’s content could be used to power AI and large-scale language models.
“Reddit is one of the Internet’s largest collections of real, continuously updated human-generated experiences,” the filing said. “In an increasingly data-driven world, we recognize that this information is increasingly important for a variety of uses and applications.”
“We believe the Internet should work for consumers and allow them to find the information they need or the experiences they want,” the filing continued. “And organizations need to prioritize sources of real-time human perspectives – from companies looking for feedback on new consumer products to investors looking to capture market sentiment or signals – Reddit offers a differentiated solution.”
Separately, Reddit announced a deal to allow Alphabet’s GOOGL.
exorcism,
Google uses Reddit posts to train AI models and improve Google Search. The deal, worth about $60 million, will “make it easier for people to discover and access the communities and conversations they’re looking for on Reddit,” the company said.
