Users were divided in their opinions
Reddit invites its users to participate in the purchase of company shares as part of the upcoming IPO. However, the Reddit community is divided on this initiative.
The Reddit proposal was announced through private messages presented as a «special program». However, users expressed different points of view on the possibility of investing in the company's shares. One of the users stated that he did not want to take risks and refused this opportunity, pointing out the unreliability of investing in user bases. Other users noted the promise, but questioned the quality of the content provided.
The r/WallStreetBets subreddit, with 15 million members, has previously exerted significant influence on the stock market by manipulating underperforming stocks or so-called “meme stocks,” exemplified by GameStop, whose losses for investors amounted to billions of dollars.
This week, Reddit is wrapping up share pre-registration for the 75,000 users it invited to participate in the process. According to documents submitted by Reddit to the Securities and Exchange Commission (SEC), the pre-registration process took into account the influence of users on the development of the community, as well as the activities of moderators. It is noted that when sending out «invitations» Reddit took into account «karma points» users who reflect their contributions to the Reddit community.
Reddit, which calls itself the “front page of the Internet,” was founded in 2005 by Alexis Ohanian, Aaron Schwartz, and Steve Huffman. The platform allows users to publish their messages and moderate communities. Last year, users showed their loyalty by rendering the platform virtually non-functional in response to administrative changes.
Reddit's valuation could be $6.5 billion, according to CNBC. Reddit was the third most visited website in the US in December 2023, beating Facebook by 535 million views, according to traffic analysis from Semrush. The platforms Twitter, Instagram and TikTok took 10th, 13th and 17th places, respectively. In the global Internet, Reddit ranks ninth according to Semrush, ahead of TikTok and WhatsApp, but behind Facebook, Twitter and Instagram.
Reddit's filings with the SEC show it has 267.5 million weekly active users, more than 100,000 active communities, and a total number of posts exceeding 1 billion. The company suffered a loss of $90.8 million last year, but Reddit said it plans to become profitable through advertising, monetization of platform trading and data licensing.
The documents also show that Reddit currently generates 98% of its revenue from advertising. In February, the platform struck a $60,000,000 deal with Google to allow it to train artificial intelligence models on Reddit posts.