Reuters - Reddit Inc, operator of online message boards that became the go-to destination for day traders chaseing this year's frenzy for so-called'meme' stocks, is seeking to hire investment bankers and lawyers for an initial public offering IPO in New York on Thursday, two people familiar with the matter said.
In a private fundraising round last month, Reddit was valued at $10 billion. Reddit would have hoped to invest in the IPO by mid next year and could be valued at more than $15 billion, one of the sources said.
The sources cautioned that the timing and size of the IPO were subject to market conditions and asked not to be identified because the preparations are confidential. A Reddit spokesperson declined to comment.
Reddit's move to hire advisers for its IPO has not been reported before, but there has been significant speculation in recent months on the company's go-public plans after years of being private. In a recent interview with the New York Times, chief executive Steve Huffman revealed that the company had committed to go public but had not decided on the timing of the move.
Reddit was founded in 2005 by Aaron Swartz, the late Internet activist and entrepreneur Alexis Ohanian, and Huffman among others. It became known for its niche discussions groups, lagging the popularity of other social media platforms such as Facebook Inc and Twitter Inc.
The San Francisco-based company was definitely a factor of explosive growth but was very well formed from retail investors who flocked to its message boards at the beginning of the year for tips on trading GameStop Corp and other meme stocks. The stock markets analysts have historically considered the stock stocks excessively overvalued, despite the fact that they have some major flaws.
Reddit had about 52 million monthly active users and a 100,000 community communities, or'sub-reddits' by October 2013. Huffman claims it gained millions of new users earlier this year during the height of the trading frenzy, but more recent user figures have not yet been released.
The company makes mostly from advertising. It reported $100 million in advertising revenue in the second quarter, an almost threefold increase from the same period last year.