Reddit looking to raise almost $750 million in initial public offering

This June 29, 2020 file photo shows the Reddit logo on a mobile device in New York. Reddit is looking to raise almost $750 million in an initial public offering of its common stock. The company said in a regulatory filing that the IPO will include 22 million shares of Class A common stock. (AP Photo/Tali Arbel, File)

Social media company Reddit is looking to raise almost $750 million in an initial public offering of its common stock.

The company said in a regulatory filing that the IPO will include 22 million shares of Class A common stock. Reddit is offering approximately 15.3 million shares, while the selling stockholders are offering about 6.7 million shares.

Reddit anticipates that the IPO will be priced between $31 and $34 per share. At the midpoint of that range Reddit would raise about $451 million, and it plans to use proceeds for general corporate purposes, taxes and possibly acquisitions.

The San Francisco-based company said that the underwriters have reserved, at its request, up to 1.76 million shares for sale at the IPO price through a directed share program to eligible users and members of its platform, certain board members and friends and family of certain employees and directors.

The underwriters were also given the right to buy up to an additional 3.3 million shares to cover any overallotments.

Reddit, which began in 2005, had more than 76 million people, on average, visit the platform every day in December, according to a letter from co-founder Steve Huffman that was included in the filing. It has more than 100 million unique subreddits.

Reddit announced plans for its IPO last month. In documents filed with the Securities and Exchange Commission, Reddit said it reported net income of $18.5 million — its first profit in two years — in the October-December quarter on revenue of $249.8 million, primarily through advertising. The company also said at the time that it struck a deal with Google, valued at approximately $60 million, that allows the search giant to use posts from the online discussion site for training its artificial intelligence models and to improve services such as Google Search. The agreement will also give Reddit access to Google AI models for improving its internal site search and other features.

Reddit's shares are expected to be listed on the New York Stock Exchange under the “RDDT” ticker symbol.