Sarah Travers
In a groundbreaking move, Reddit, the renowned social media platform celebrated for its vibrant communities and dynamic discussions, is revolutionizing its upcoming initial public offering (IPO) with an inclusive opportunity for its users. Breaking away from the conventional IPO model, Reddit is extending a unique invitation to select users to partake in becoming shareholders as it prepares to go public later this year.
Unveiled within its IPO filing last week, Reddit introduced its innovative “direct share program,” aimed at integrating its community of users into its transition to a publicly traded entity. This pioneering approach diverges from the norm, which typically caters primarily to institutional investors.
Reddit’s initiation of this process involves reaching out to specific users, chosen based on their significant contributions as moderators of Reddit forums, known as subreddits, or their overall engagement and reputation on the platform, as indicated by their karma score.
For those who may not receive direct invitations, Reddit is offering a pre-registration option. Eligible adult US residents with Reddit accounts created before January 1, 2024, have the opportunity to participate, provided they are not current or former employees of Reddit.
The pre-registration window is scheduled to open from March 1 to March 5, with Reddit implementing a waitlist if demand exceeds capacity before the deadline. Upon the closure of registration, confirmed participants will receive detailed instructions from Reddit.
While Reddit has not disclosed the IPO share price, recent financial reports reflect promising growth. Despite a reported net loss of $90.8 million in 2023, an improvement from previous years, Reddit demonstrated significant sales growth, reaching $804 million, a 21% increase from 2022. Furthermore, the platform’s daily active user count surpassed 73 million in the final quarter of 2023, signaling substantial growth momentum.
This initiative by Reddit to engage its users in its IPO journey underscores the platform’s dedication to its community-centric ethos. It comes at a pivotal moment when Reddit’s influence in financial markets is gaining recognition, notably exemplified by the WallStreetBets community’s impact on the GameStop stock surge in 2021, showcasing the potency of collective action among individual investors.
As Reddit gears up for its transition to a publicly traded company, it prioritizes transparency and engagement with its user base. Alongside the direct share program, Reddit users will have the opportunity to submit questions for consideration during its quarterly earnings calls, traditionally reserved for Wall Street analysts.
With its IPO poised to debut on the New York Stock Exchange under the ticker symbol “RDDT,” Reddit stands as a trailblazer, marking the first major social media company to go public in recent years. As the platform continues to evolve and expand, its decision to involve users in its IPO journey underscores its commitment to community empowerment and inclusivity within the realm of finance.
