Reddit and its shareholders are looking to sell almost $748 million worth of stock in its IPO. The company itself only gets the proceeds from the shares it sells, and at the high end of its price target of $34 per share, the platform could raise $519 million with its stake. But while meeting that goal would give the company a value of $6.5 billion, it’s meager compared to the capital raised by other social media platforms in their initial public offerings.
Reddit may be a recognizable name, but it’s worth a lot less than industry behemoths Facebook (now Meta) and Twitter (now X) were when they went public. In fact, Reddit’s potential value in 2024 is one-sixteenth of Facebook’s in 2012 when it launched its own IPO.
Back then, Facebook raised a whopping $16 billion as it went public. For comparison, Snapchat made $3.4 billion from its IPO in 2017, while Twitter fetched $1.8 billion in 2013. (Of course, Twitter went private when it was purchased by Elon Musk in 2022 and rebranded as X.)
To be sure, Reddit doesn’t try to liken itself to the big guns of social media. Reddit may be an ad and subscription-based web platform, but it’s a lot more similar to smaller sites like crowd-sourcing tool Quora and post-and-poll platform Hive than it is to Instagram or X.
“We’re a platform and tech company on one hand, but on the other, [Reddit is] a living organism, this democratic living organism, created by its users,” CEO Steve Huffman told The Verge last summer. He also likened the site to a city (which may be a touch far-fetched).
And Reddit’s goal would generate a pile of capital worth as much, if not more, than big-time social media platforms’ IPOs as a fraction of their total value. Facebook’s IPO generated capital worth 15% of its total valuation, and Snapchat raised funding equal to 14% of its value. But if Reddit and its shareholders’ meet their goal to raise 11.5% of its potential $6.5 billion valuation, it would surpass Twitter’s funding as a share of its value.
Sound confusing? Here’s a chart to make it easier.