Reddit was founded in 2005 by Steve Huffman, Aaron Swartz, and Alexis Ohanian. Since then, it has become one of the largest and liveliest social platforms on the internet. Without Reddit, we might never have AMAs. It’s not quite as mainstream as platforms like Facebook, Instagram, Twitter, or TikTok, but Reddit’s seemingly infinite supply of communities — known as subreddits — has made it one of the web’s best sources of information and conversation. But Reddit has also been a magnet for controversy: Redditors have used the platform to spread misinformation and coordinate harassment, and it has been a source of illegal and problematic content for years. In 2023, Reddit brought more controversy on itself, announcing new plans to charge for its API that led to Apollo and other third-party apps shutting down along with a mass protest from users. And of course, like so many other things, the whole fight seemed to happen on Reddit.
Keith Gill, the same Redditor who sparked a frenzy in 2021 has returned, and the stock is spiking again. The WSJ reports that in addition to E*Trade’s discussions, SEC officials are having “internal discussions” about whether the new posts amount to manipulation.
Meanwhile, Gill posted another screenshot this afternoon showing an account with shares and options now worth $260 million.
Reddit’s daily users grew 37 percent to 82.7 million during its first quarter as a public company. CEO Steve Huffman said on the earnings call that 60 percent of those users are logged out and coming mostly from Google.
“Googlebot likes speed” and Reddit has focused on improving load times, he said. More on the numbers below:
It ended trading at roughly $50, which means the business is valued at about $9.5 billion. That’s quite a pop from the $34 that Reddit priced its shares at going into the IPO. As a result, everyone who bought in at that price— like Reddit power users — saw a nice gain today.
Reddit (RDDT) is officially open for trading. According to CNBC, Reddit and selling shareholders raised about $750 million from the IPO.
With its current share price of $48, the 19-year-old website now has a market cap of $7.6 billion as it pursues business growth via “advertising, monetizing commerce on the platform, and licensing data.”
Reddit’s IPO, which will have the ticker symbol RDDT, is making its debut tomorrow. Sources tell CNBC it’s priced at the “top” of the $31 to $34 range it targeted, which puts the social platform at a valuation of around $6.5 billion.
Many of the Redditors I spoke to did not care for the IPO. I went on Marketplace to talk about the usefulness of Reddit as an online community — and why that may just be really difficult to make profitable.
In an amended SEC filing ahead of its IPO, Reddit warned potential investors that “...on March 18, 2024, Nokia Technologies sent us a letter indicating they believed that Reddit infringes certain of their patents. We will evaluate their claims.”
Nokia, of course, leaned into, ahem, patent licensing and networking equipment as its business many years ago, and reminded people of it with last year’s logo redesign. Companies paying Nokia licensing fees include HTC, Apple, and more recently, Oppo.
The company hopes to raise up to $748 million when it goes public by selling about 22 million shares at $31 to $34 per share, according to a public filing issued Monday after Bloomberg first reported the number.
Part of its plan will rest on its own users and moderators, for whom the company will set aside 1.76 million shares. Reddit’s valuation would be down from the $10 billion it hoped for when it first filed to go public in 2021.
Update March 11th, 6:41AM ET: Added official filing.
Ahead of its IPO, Reddit announced a set of tools for businesses that want to be more active on the platform — including the ability to see which subreddits are mentioning a brand. For businesses, Reddit says it’s a way to “establish and grow a meaningful organic presence on Reddit.” In other words: the brands are coming.
That’s according to The Wall Street Journal, which says Reddit could shoot for a price range between $31 to $34 per share when launching its IPO. The $6.5 billion number is significantly lower than the more than $10 billion Reddit was valued at in 2021 following a round of funding.
The Vergecast team threw out some ideas yesterday for what random names Google will use for future chatbots. I like “Fancy Geoff.”
Give it a listen if you want to catch up on stuff like Gemini’s first big controversy, The adventures of Apple and the post-quantum cryptography, and your place in Reddit’s AI-training corpus. Also, two lightning rounds!
A fun fact from Reddit’s IPO filing: Sam Altman owns more shares than CEO Steve Huffman! Reddit’s three largest shareholders in order are: Advance Publications (which owns Condé Nast), Tencent, and Altman.
The OpenAI CEO owns 8.7 percent of the stock versus Huffman’s 3.3 percent. He has more than double Huffman’s voting power, too.
While he isn’t a co-founder, Altman has been deeply involved in Reddit since basically the beginning. He quietly stepped off the board in 2022 as OpenAI was rising to prominence and Reddit was gearing up to go public. Now, he owns a big chunk of a company that really wants AI companies to pay for its data. Interesting times!
Charging for data access was a flash point for last year’s protests, with Reddit CEO Steve Huffman telling The Verge, “...data licensing is a new potential business for us.”
Now, with Reddit’s IPO launch close at hand, Reuters is putting a name on rumors of an AI company that’s paying Reddit for training data, in a deal that could be a model for similar arrangements, citing three sources who say the company is Google.
There are rumors the Reddit IPO is happening soon. Some of the most active Redditors may get the opportunity to buy in at the IPO price. Is a new meme stock in the making? Maybe!
In the 2020s, some companies are owned in large part by retail investors, and some of those investors are more interested in being part of an online community of investors, and trading jokes and memes, than they are in financial analysis. And you can make those investors happy in less traditional ways, like by giving them popcorn or buying a gold mine or doing a YouTube interview with no pants on.
[Bloomberg]
The company is now looking at March. It’s been moving toward a public offering since December 2021, shortly before the market started to dip.
The well-known discussion forum, which has been rumored to be heading toward an IPO in 2024, has not done as well as it was hoping to, according to an article in The Information. Reddit was apparently hoping to earn more than $1 billion in ad revenue by the end of this year, and hasn’t quite gotten that far, having only hit a mere $800 million. Considering all the changes and controversies Reddit saw in 2023, it will be interesting to follow what happens next.
[The Information]
You can no longer make new live chat posts, existing ones will work until early 2024, Reddit says. You’ll still be able to have live chats on Reddit, just through its Discord-like chat channels — though the chat channels are still in beta and mods have to fill out a form to request access to them for their communities.
You can see your personal recap by tapping or clicking the banana icon at the top of the app while logged in (though it doesn’t seem to show up on the Old Reddit desktop interface for me).
This year, Reddit has added “Community Recaps,” which “highlight the top posts, comments, and visitors unique to the subreddit,” according to a post from Reddit.
In Reddit’s all-up 2023 recap, there was no direct mention of this year’s user outcry. However, the company did reference John Oliver, who some subreddits featured in protest, as “surely the only man who can make an API update sexy.”
The font, Reddit Sans, looks nice, but the 3D Snoo kind of reminds me of the Michelin Man. You can read all about the updates in this post from a Reddit admin (employee) and on Reddit’s brand page.
The company has a new tagline, too: “The heart of the internet.”
Bloomberg reports that Reddit is “holding talks with potential investors” about an IPO that could take place as early as the first quarter of next year.
The company filed a confidential S-1 with the SEC in late 2021 but hasn’t actually gone public yet. When I asked CEO Steve Huffman in June of this year about an IPO, he said that “it’s something we’d like to do someday.”
Reddit recently introduced some changes to its interface when you’re logged out on mobile web and desktop, and now it’s starting to let a “small number” of users use it when logged in, according to a post detailing some Reddit feature updates on Monday. Reddit is also letting non-mods apply to try the updated experience.
For what it’s worth, I actually like the updated UI quite a bit.
