$800 million in revenue, 20% growth, yet to turn a profit: "American Baidu" Reddit discloses financial report before IPO

Is Reddit, the "American Tieba," becoming the leader in the tech industry's IPO this quarter?

On Tuesday, February 6th, media reports cited insiders who revealed that Reddit plans to go public in March this year and has released its financial report in advance. The report shows that Reddit's revenue in 2023 exceeded $800 million, with a year-on-year growth of over 20%, but it did not achieve profitability for the whole year, with an adjusted EBITDA loss of approximately $69 million.

Nevertheless, insiders revealed that Reddit achieved profitability in the fourth quarter, but the specific profit figures have not been disclosed. In terms of market valuation, Reddit has been advised to consider a valuation of at least $5 billion.

Public information shows that Reddit is a social media company headquartered in San Francisco. Since its establishment in 2005, Reddit has grown into an important social media platform with over 70 million daily active users (data as of October last year). Reddit is well-known for its WallStreetBets forum.

The WallStreetBets forum attracts a large number of retail investors. The forum has caused stock market fluctuations due to the collective purchase of "retail concept stocks" such as GME, highlighting the influence of social media in the financial market. "Retail concept stocks" refer to stocks that receive a lot of attention and discussion on social media platforms, especially in specific forums on Reddit. These stocks are often sought after by investors due to their popularity in online culture rather than fundamental factors of the company.

Analysts believe that if Reddit proceeds with its IPO as planned, it may become one of the first large tech companies to go public this quarter. In the past two years, the macro environment has been sluggish, and investors have become increasingly cautious, leading to a slowdown in IPO activities. The capital market is looking for signs of a recovery in the IPO market. Reddit's IPO plans and the upcoming disclosure of its documents will serve as an important window for observing the current state of the IPO market.

In addition to Reddit, tech companies that may go public this quarter include data storage company Rubrik and "AI unicorn" Astera Labs. The IPOs of Reddit and other tech companies will have an impact on the overall sentiment of the investment market. A successful IPO could enhance investors' confidence in the tech sector and emerging markets.

Insiders said that two years ago, Reddit submitted its IPO documents confidentially to the U.S. Securities and Exchange Commission (SEC) for the first time. Now the company is preparing for its IPO, and Reddit and its advisors expect to publicly release its IPO documents as early as this month, which would allow the company to be listed on the New York Stock Exchange in March. Reddit's initial public offering (IPO) has attracted the participation of approximately 16 banks, led by Morgan Stanley and Goldman Sachs Group, including JPMorgan Chase, Bank of America, and Citigroup. However, both Reddit and its collaborating financial institutions have remained silent on the details of the IPO.