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Reddit is in discussions with potential investors regarding an upcoming initial public offering (IPO), signaling a potential resurgence in the market for new listings. The San Francisco-based social media company, known for its influential user base in the meme-stock frenzy of 2021, is contemplating an IPO as early as the first quarter. Reddit had previously collaborated with Morgan Stanley and Goldman Sachs on the listing, exploring a valuation of up to $15 billion, as reported last year.
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The US IPO landscape has faced challenges in recent months due to market volatility and lackluster performances of notable debuts in September and October. These factors have contributed to a cautious approach among companies planning first-time share sales, closing the door on significant IPOs for much of 2023. Given the subdued IPO activity, companies and their advisors are now looking toward 2024 for a more favorable environment, with the total US IPO volume for the year expected to only marginally surpass 2022, which was deemed the worst year for IPOs in over a decade, according to Bloomberg data.
Why it matters
Despite the challenges, Reddit's potential IPO in the first quarter suggests a renewed optimism and interest in new listings, with the company aiming to leverage its robust user community and capitalize on market conditions that align more favorably with successful public offerings.