If you’ve been waiting for the day when Reddit goes public, the wait may soon be over. As of now, the popular social media platform has officially filed for an initial public offering (IPO). According to the recent prospectus filed with the U.S. Securities and Exchange Commission (SEC), the company plans to trade under the symbol RDDT on the New York Stock Exchange (NYSE). No official date has been set yet, but if the Reddit IPO proceeds with no complications, RDDT will likely make a significant splash. Not only will it be the first major tech IPO of 2024, it will be the first major social media platform to go public since Pintest (NYSE:PINS) began trading in April 2019.
What else should investors know about the pending Reddit IPO and about the stock that promises to take markets by storm when it debuts? Let’s take a closer look at what’s likely in store.
RDDT Stock and the Reddit IPO
Filing for an IPO is just the first step for a company that wants to go public. However, it shows that Reddit is serious about finally joining the ranks of its publicly traded peers. Given its status as a favorite platform among the retail investors who used r/WallStreetBets to drive the GameStop (NYSE:GME) squeeze of 2021, it seems likely that the newly minted RDDT stock will quickly garner meme stock status.
The Reddit IPO also comes at a time when data shows that investors are losing interest in other popular meme stocks. As such, it is an excellent time for a company that the r/WallStreetBets crowd loves to start trading. However, this IPO seems a bit unusual. As The Wall Street Journal reports:
“The company plans to reserve an as-yet-undetermined number of shares for 75,000 of its most prolific so-called redditors when it goes public next month, according to people familiar with the matter. The users will have the opportunity to buy Reddit shares at its initial public offering price before the stock starts trading, a privilege normally reserved only for big investors.”
If this is how the Reddit IPO progresses, many retail investors will likely be celebrating when they are able to buy RDDT stock. As the company is planning a non-traditional debut, it is hard to assess how well the stock will do when the initial meme stock momentum cools down. That said, it will still be the year’s first major tech IPO, and investors should pay close attention as it nears.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
