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The $10bn platform whose users have increasing influence on the stock market has begun preparations to go public.
Message board Reddit has begun seeking financial and legal partners for a New York public listing early next year, Reuters has reported.
The report cited “two people familiar with the matter”, and Reddit declined to comment on the issue.
The size and exact date of the eventual initial public offering (IPO) will depend on market conditions, according to the sources.
Steve Huffman, the company’s CEO, had publicly stated its intentions to go public as recently as August, but had not said how soon the plans would move forward. The Reuters report is the first indication the company has formally begun preparations.
Last month, a fresh round of investment valued the company at $10bn. Firms with major stakes in Reddit include Fidelity Investments, Tencent Holdings, Sequoia Capital and Andreessen Horowitz.
Despite having been privately owned since its founding in 2005, Reddit has not-insignificant influence on the US stock market. In January, co-ordination by users of a Reddit board caused shares of GameStop to increase by more than 1,700pc. This week, users on the forum caused a significant jump in the value of Support.com and drove huge sales of non-fungible tokens.
The Wall Street Journal reports that hedge funds and investment titans such as Goldman Sachs and Morgan Stanley now regularly have employees monitor Reddit to try to predict market moves ahead of time or seek trading tips.
If the IPO goes ahead, however, the market will, conversely, have a say in determining the future of Reddit.
As of late 2020, the platform had approximately 52m daily active users on 100,000 forum communities, called subreddits. It earns money primarily from advertising, revenue from which hit $100m in the second quarter of 2021.
Reddit has struggled with instances of online abuse and disinformation on its platform. This week, it clamped down on a number of subreddits accused of spreading conspiracy theories and denialism about Covid-19.
The company was forced to take this action, despite Huffman previously saying it did not plan to do so, after a number of prominent subreddits set themselves to private mode to protest Reddit’s handling of the situation.
This is not the first time Huffman and Reddit have been criticised for a light-touch approach to moderation. Last summer, Huffman’s predecessor Ellen Pao accused the company of “monetising white supremacy”.
