For Variety VIP+ Subscribers: Reddit’s Rocky Road to a 2023 IPO
to hit the public market in the back half of this year, after confidentially filing to go public way back in December 2021. Super-high-profile IPOs have been hard to come by these days, and that’s been for good reason.
The most obvious one is the unfavorable market and macroeconomic environment of last year spilling over into 2023. When Reddit first filed for IPO in December 2021, it made sense. The stock market was seeing double-digit returns, corporate earnings were up, and interest rates were low. That kind of backdrop was fertile ground for IPOs, and 2021 was a record-breaking year.
Then things took a sharp turn in 2022 with high inflation, rising interest rates and a war in Ukraine. There were only 71 IPOs that raised a total of $7.7 billion in 2022, which marked the slowest year by proceeds in 30 years,In the best-case scenario, it typically takes companies some six to nine months from filing to actually IPO, so the timing could not have been worse for Reddit. The market was certainly at its worst in the summer of last year.
But there’s still so little visibility into what the second half of this year will look like, and timing this kind of market wouldn’t be very smart. With inflation proving not to be transitionary, interest rates still rising and geopolitical tensions persisting, it’s hard to imagine a situation in which conditions would improve enough in the back half of this year to warrant a unicorn IPO.
Especially because Reddit, like other social media companies, also relies heavily on advertising. With companies pulling back on overall spending, advertising budgets are usually the
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