Online discussion platform Reddit is preparing to launch its initial public offering (IPO) amid revenue struggles, according to Reuters.
ADVERTISEMENTReddit is to offer around 10% of its formerly private shares to the public in a move that was first envisaged three years ago, said unnamed sources cited by Reuters.
The San Francisco-based firm is reportedly planning to make its public filing in late February and will complete the public offering process in late March.
The IPO valuation, which indicates the value of a company's shares and is influenced by demand, has not yet been decided.
Reddit was valued at around $10 billion (€9.19) in 2021 but web developer Steve Huffman said, just last year that the company had yet to turn a profit.
The social platform's main source of revenue is its advertising; it faces fierce competition from sites such as Facebook and TikTok.
Media site The Information last month estimated Reddit's 2023 advertising revenue at $800 million (€735.33), a figure up more than 20% from the previous year.
Reddit also generates revenue through premium subscriptions, offered for $5.99 (around €6) a month.
This allows users to read discussion threads without ads, gain access to exclusive virtual lounges, and to buy accessories for their avatars.
The company was originally reluctant to offer public shares until profit figures improved, and challenges in the IPO market delayed Reddit's plans.
Firms Arm, Klaviyo and Instacart all went public late last year, raising hopes for the future of IPOs. Despite that, the market still ended the year in lacklustre fashion.
There were just 370 IPOs launched globally in the last three months of 2023, a figure down from 417 a year earlier, and 921 in the same period of 2021, according to S&P Global.
The research firm noted the last three months of 2023 represented the slowest fourth quarter for IPOs since 2012.
Despite the underwhelming figures, social media stocks have been performing well over the last year, partly driven by a rally in tech stocks due to high interest rates.
Reddit's IPO, which sources say could be pushed back, will test the willingness of the site's users to back the firm on the stock market.
