- Reddit's filing comes as US IPOs touched record highs in 2021, fueled by ample liquidity.
- Reddit saw explosive growth as retail investors flocked to its message boards for tips on meme stocks.
- Its advertising revenue jumped almost threefold on-year in the second quarter.
Reddit, known for its message boards that became the go-to destination for day traders during this year's meme stock frenzy, said on Wednesday it had confidentially filed for an initial public offering with US securities regulators.
Several hedge funds took a hit from the surge in stocks, as they had bet against the Reddit darling in question.
Founded in 2005 by Steve Huffman and entrepreneur Alexis Ohanian, Reddit was valued at $10 billion in a private fundraising round earlier this year.
Reuters reported in September that the company was hoping for a more than $15 billion valuation by the time an IPO occurs.
The filing comes as US IPOs touched record highs in 2021, fueled by ample liquidity due to accommodative monetary policies. Robinhood Markets, Coupang, and Coinbase Global all launched IPOs in the US this year.
Reddit had roughly 52 million daily active users and over 100,000 communities, or "sub-reddits," as of October last year.
The company saw explosive growth as a result of retail investors flocking to its message boards at the start of the year for tips on trading GameStop and other so-called meme stocks.
San Francisco-based Reddit reported $100 million in advertising revenue in the second quarter, an almost threefold jump from the same period last year.
In March, the company hired Drew Vollero — who as the first finance chief of Snap Inc. guided its transition to a public company — as its first chief financial officer.
The company's biggest investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital, and Tencent Holdings.
Reddit did not disclose the number of shares to be offered or the price range of the IPO in the draft registration statement with the US Securities and Exchange Commission.
Meanwhile on WallStreetBets, the subreddit on which many meme-stock retail traders discuss strategy, members began to joke about boosting Reddit's stock once it goes public.
Comments like "Reddit to the moon" and "instant meme stock" were posted on the message board.
Some didn't like the idea of the social media platform's listing. One user said of the IPO: "That is pretty depressing to hear. Reddit has been the place I call home online for a long time and this means a lot of changes are going to happen, probably for the worst. Nothing lasts forever I guess."