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Reddit's Impressive Revenue Growth Sets Stage for Highly Anticipated IPO

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Ticker Tea
February 06, 2024

📝 SUMMARY: Reddit Inc., a key player in the social media landscape, has reported a significant revenue increase of over 20% in 2023 compared to the previous year. The company's revenue soared to more than $800 million, up from $666 million in 2022, signaling robust growth ahead of its highly anticipated initial public offering (IPO). Despite this impressive revenue uptick, Reddit has not yet reached profitability for the full year, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) showing a loss of approximately $69 million. However, it's noteworthy that the company did achieve profitability in the fourth quarter of 2023.

As Reddit advances towards its public market debut, the company is reportedly considering a valuation of at least $5 billion. This move comes more than two years after Reddit confidentially filed with the US Securities and Exchange Commission, marking a significant step in its journey towards becoming a publicly-traded company. The upcoming IPO is being closely watched as an indicator of the health of the IPO market, which is experiencing a cautious recovery after a two-year slump in new listings.

Reddit's IPO is being managed by a consortium of about 16 banks, including leading names like Morgan Stanley ($MS) and Goldman Sachs Group Inc. ($GS), with JPMorgan Chase & Co. ($JPM), Bank of America Corp. ($BAC), and Citigroup Inc. ($C) also involved. The company is expected to publicly unveil its IPO filing soon, potentially as early as this month, keeping it on track for a New York Stock Exchange listing possibly in March.

Founded in 2005, Reddit has become an influential platform in the internet culture, particularly noted for its role in the meme-stock phenomenon through its WallStreetBets forum. The platform boasts over 70 million daily active unique visitors as of October. Reddit's upcoming IPO is part of a wave of significant technology IPOs expected this quarter, indicating a potentially vibrant period for the tech sector in the public markets.

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