If you're looking to buy, sell (if you got those community shares) or short Reddit at it's IPO, this video is for you.
First, mark the date:
Thursday, March 21, it will IPO on the New York Stock Exchange under the ticker symbol RDDT, typically IPO's launch around 10 AM EST
Here's what we'll discuss:
1. Reddit's own WallStreetBets doesn't like the IPO and what's to short it, but why?
- 15m users voted to short it
- lack of profitability and competitive issues
- volunteer mods early buy program, big employee stock sales, AI ambitions..
- listed as a risk factor, on S-1, as there is no holding period
- 8% of the float is going to "redditers"
- not locked up, so they can sell right away
- similar to Robinhood allowing the same to it's retail buyers
2. Finding from the IPO filing Form = SEC Form S-1
- Is the initial registration form for new securities required by the SEC for public companies that are based in the U.S
- ARPU 3.42, very low compared to comps
- $3.42 vs $40+ FB, $24 TWTR and $22 IG and $14 Linkedin
- NOTES: 98% media ads rev
- $3.42 vs $40+ FB, $24 TWTR and $22 IG and $14 Linkedin
- Wants to raise $748 mill in IPO through sale of 22m shares
- Currently, Reddit IPO sees 4-5x oversubscription
- eyes $6.5 billion valuation
- 73m daily active user, online communities called sub-Reddits
- 20% rev growth 2024 (this is very strong) typically closer to 5% YoY
- Main Rev 98% through advertising and now also AI training data sets
- Additional Info:
- Reddit cashes in on AI gold rush with $203M in LLM
3. 2023 Big IPO's and how they are doing
- ARM, KYVO, BIRK, CART
- 2 below 2 above IPO price
- All dipped below IPO price; for at least several weeks
- Slow IPO market currently, but it is heating up
4. What the all-in Podcast thinks about the IPO
E168: Can Google save itself? Abolish HR, AI takes over Customer Support, Reddit IPO teardown (All-in Podcast main points)
- Business flatlined, 5% growth YoY, last 2 quarters saw a bigger boom, worried valuation is at this "random" boom level. And they don't know why. If that stops could be bad, Reddit needs a good answer for that.
- 2023 rev $804m up 21% YoY
- 2023 -$91 min profit, So NET it's losing money.. bad for this macro env..
- Free cashflows neg
- DAUg, 76m up 27% Y0Y
- Weekly active unique (“WAUq”) metric and daily active unique (“DAUq”)
- ARPUissue
- 5-7x multiple puts them at this $6.5b rev
5. My unprofessional price target
- Aug 2021 $10B round; $700 million in a fundraising round led by Fidelity Management
- https://docs.google.com/spreadsheets/d/16BYvn7tB_TocMKds0wdqEY2_5kkRkKEVJ80Ql7Qd_PE/edit#gid=269691204
- In reality no idea, it's oversubscribed and if I wanted to invest tn the IPO I probably would start a DCA initiative under $30, especially lower-end $20's
- If we see $40 and I was long I'd be selling
- 0:00 Reddit's IPO $RDDT
- 2:30 Reddit's WallStreetBets Bearish on IPO
- 5:40 Reddit's IPO Filing = SEC Form S-1
- 11:15 Big 2023 IPO's & How They're Doing
- 13:50 All-in Podcast vs Reddit IPO
- 15:10 My $RDDT Price Target
Non S-1 Pics:
