Reddit is moving ahead with its IPO and plans to raise between $682 million and $748 million on a fully diluted valuation of between $5.8 billion and $6.4 billion. Although no date has been announced, the IPO is expected to take place sometime this month. According to a Securities and Exchange Commission filing Monday, Reddit says it will offer 22 million 15.3 million Class A common shares and 6.7 million insider shares from investors including CEO Steve Huffman and COO Jen Wong. Pricing will be between $31 and $34 per share. The proposed market cap is $4.9 billion to $5.4 billion.

Variety says the Reddit IPO is “poised to be one of the biggest initial public offerings of the year.” CNBC points out it will be the “first major tech debut” of 2024 and “the first social media IPO since Pinterest went public in 2019.”

TechCrunch did the math on $804 million in 2023 revenue and reports Reddit is on track to trade at a multiple of 6.9x to 8x, and could go even bigger “if investors agree to go higher than the $34-per-share range after its roadshow with them.”

That may seem high, but not if you focus on AI revenue, TechCrunch suggests. In its February 22 registration filing, Reddit disclosed 2024 contracts worth $203 million from AI companies that want to access its content.

The site is based on user-generated content, with contributors submitting posts — largely in response to community questions — that readers vote up or down based on things like relevance and accuracy. As such, Reddit boards are in many ways an ideal AI training tool.

The company says it has reserved up to 1,760,000 shares of what will be Class A common stock (about 8 percent) for contributors and other insiders, noting that “users and moderators who created their account on or before January 1, 2024 are potentially eligible.” Those shares “won’t be subject to a lockup,” meaning community members can sell them on opening day, a potentially risky move.

Bloomberg reports of “a historically combative relationship” between the site and Redditors who have ‘launch[ed] revolts over everything from racism on the platform to executives’ staffing decisions.” Concerns over changes that may result from being publicly held are a recent point of contention, according to The Verge, which suggests disgruntled users may opt to short the stock.

Condé Nast acquired Reddit in 2006, then in 2011 spun out as an independent entity with parent Advance Publications retaining a minority stake that remains the single largest block.

Last month, Reddit’s IPO plans resurfaced along with a Google deal reportedly worth more than $60 million per year and reminders that the company in December 2021 submitted a confidential draft IPO registration statement to the SEC, then sat on it waiting for market conditions to improve.

Related:
Reddit Launches Free Tools to Help Businesses Grow Their Presence on the Site Ahead of IPO, TechCrunch, 3/8/24
Reddit Will Now Use an AI Model to Fight Harassment (APK Teardown), Android Authority, 3/6/24