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Reddit Is Letting Power Users In on Its IPO. Not Everyone’s Buying

Wired · 1y ago

Reddit Is Letting Power Users In on Its IPO. Not Everyone’s Buying

Reddit users are showing little interest in buying shares of the company before its upcoming IPO, despite being offered the opportunity. Many moderators and power users on the platform are skeptical of the company's prospects, given its history of never making a profit and losing $91 million last year. Some users view the offer as Reddit leveraging their data and work to sell back shares to them. This cold response from users could impact the company's stock prices when it goes public next month.

Related News

Reddit reveals how much karma you'll need for a chance to buy into its IPO early

Business Insider

Business Insider · 1y ago

Reddit reveals how much karma you'll need for a chance to buy into its IPO early

Reddit has outlined six tiers in its IPO paperwork that will determine which users will have the opportunity to buy its stock at the IPO price ahead of its public debut. The tiers are based on factors such as user karma and moderator actions. The first tier is reserved for users and moderators who have made significant contributions to Reddit community programs. Reddit plans to offer stock to select users in addition to larger money managers, a move that is relatively uncommon in IPOs. Up to 75,000 Redditors are expected to have access to the directed share program in March.

Reddit IPO could usher in the next big meme stock, users speculate

TechCrunch · 1y ago

Reddit IPO could usher in the next big meme stock, users speculate

Reddit, the popular social media platform, plans to go public with an IPO and is offering shares to its devoted users. In a departure from the norm, Reddit is giving priority to investors based on their amount of karma, a measure of user contribution. Users who see the potential for Reddit to become the next meme stock are considering investing. Communities like r/WallStreetBets have already had a significant impact on the stock market. However, some users are skeptical about the IPO, believing it is a ploy to profit from user loyalty without giving them free shares.

Redditors don't want to buy Reddit stock

Business Insider

Business Insider · 1y ago

Redditors don't want to buy Reddit stock

Reddit is going public with an IPO next month and has recently announced a $60 million annual deal with Google for content licensing. Interestingly, Reddit is giving moderators the opportunity to buy stock, a move that may add volatility to the stock's performance. However, reactions from Reddit's power users have been mixed, with some expressing disinterest and skepticism. While it's unclear how this will affect Reddit's IPO, online sentiment seems to lean towards skepticism and humor.

Reddit plans to reserve shares for its big users in IPO, WSJ reports

Reuters · 1y ago

Reddit plans to reserve shares for its big users in IPO, WSJ reports

Social media platform Reddit is reportedly planning to offer a portion of its IPO shares to its most active users. The company aims to reserve a number of shares for 75,000 of its top contributors, allowing them to purchase shares at the initial public offering price ahead of trading. Reddit, valued at $10 billion in 2021, has not yet responded to requests for comment. The company has been preparing for its IPO since December 2021, and if successful, it would be the first major social media company to go public since Pinterest in 2019.

Reddit users made meme stock prices go crazy — now they could do the same with Reddit's own stock IPO

Business Insider

Business Insider · 1y ago

Reddit users made meme stock prices go crazy — now they could do the same with Reddit's own stock IPO

As GameStop and AMC experienced extreme fluctuations in stock prices in 2021 due to Reddit discussions, the social media platform is now cautioning investors about potential volatility in its own stock after its upcoming IPO. In its recently filed S-1 document, Reddit acknowledged that individual retail investors could drive significant price swings in its stock. They are also offering frequent users the opportunity to participate in the IPO, which is seen as an unusual approach that could further contribute to stock volatility. Meanwhile, Reddit's WallStreetBets subreddit, where users have expressed bearish sentiments towards the IPO, is mentioned multiple times in the S-1 document.

Reddit cites r/WallStreetBets as a risk factor in its IPO filing

TechCrunch · 1y ago

Reddit cites r/WallStreetBets as a risk factor in its IPO filing

Reddit's recent S-1 filing for its IPO has highlighted the potential risks associated with meme stocks and the r/WallStreetBets subreddit. The company acknowledges that the market price and trading volume of its stock could experience extreme volatility due to the popularity of r/WallStreetBets among retail investors and the accessibility of trading platforms. It also emphasizes the risk of not achieving or maintaining profitability in the future, as Reddit has consistently operated at a loss. However, Reddit plans to invite users and moderators to buy stock at the IPO price through a directed share program, based on their community contributions.

Reddit's IPO as much as five times oversubscribed

Economic Times

Economic Times · 1y ago

Reddit's IPO as much as five times oversubscribed

Reddit's IPO is oversubscribed and it is likely to achieve its targeted valuation of $6.5 billion. The social media platform is expected to price its IPO between $31 and $34 per share when it goes public this week. While Reddit has faced challenges, such as financial losses and content moderation issues, it has a loyal user base and influential communities. The company has reserved a portion of its shares for retail investors and eligible platform users. Reddit had an average of 73.1 million daily active users in the last quarter of 2023.

Reddit files to go public — at last

TechCrunch · 1y ago

Reddit files to go public — at last

Reddit has filed for an initial public offering (IPO), making its entrance into the public markets. The company's S-1 filing shows that it earned over $800 million in revenue in 2023, but remains unprofitable. In 2022, Reddit had a net loss of $158.6 million, improving to a loss of $90.8 million in 2023. The IPO will test Reddit's valuation, which reached $10 billion in its last funding round. In a unique move, Reddit plans to reserve shares for around 75,000 of its users. Additionally, Reddit has reached a deal with Google to use its data, providing a tailwind for future revenue growth.

Potential 'meme stock' Reddit to raise ~$748M in IPO, will let Redditors sell shares immediately

TechCrunch · 1y ago

Potential 'meme stock' Reddit to raise ~$748M in IPO, will let Redditors sell shares immediately

Reddit is planning to go public through an IPO, and it is garnering attention not just because of its unprofitable nature, but also due to its unique approach of involving its community members in the IPO process. Reddit intends to sell around 22 million shares, potentially raising about $748 million at the top end of the price range. What makes it interesting is that Reddit is allowing its community members to immediately sell their shares, which could potentially lead to volatility and speculation similar to the GameStop stock frenzy. However, there is also the risk of Reddit's stock being manipulated, as previously witnessed with r/WallStreetBets.

Reddit may need to ramp up spending on content moderation, analysts say

Economic Times

Economic Times · 1y ago

Reddit may need to ramp up spending on content moderation, analysts say

As Reddit goes public, analysts are warning that the company's heavy reliance on volunteer moderators is not sustainable and could put it at risk of condoning objectionable content. With the increased scrutiny that comes with being a public company, Reddit will face the need for substantial investment in content moderation. This could result in a rise in expenses and the need to hire more staff for trust and safety efforts. Additionally, Reddit will need to address concerns regarding offensive content in order to retain advertisers. Despite these challenges, Reddit had a successful IPO, gaining 48% on its debut.

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