Last month, Reddit announced that it had filed with the Securities and Exchange Commission for an initial public offering of shares on the New York Stock Exchange, an event that observers had been anticipating for several years. (The company filed an initial statement of intention to go public in December 2021). It is expected to start trading later this month. In a blog post, Reddit described itself as a “community of communities, built on shared interests, passion, and trust” and said that it is home to the most “open and authentic conversations on the internet.”
Ironically, at least some of those open and authentic conversations have recently concerned how terrible the Reddit stock offering will be for the community, which has developed a reputation for its somewhat anarchic attitude. One member of r/WallStreetBets, a subreddit (which is what Reddit calls its forums), suggested that others should “short the shit out of” Reddit’s stock. (Short sellers profit from a stock by betting that its price will go down.) Some users called the IPO the “beginning of the end.”
In what appeared to be an attempt to win over some of these skeptics, Reddit set aside a certain number of IPO shares for the community’s most active users. Fortune reported that in early March, some of these users logged into their accounts to find a message asking if they wanted the option to buy stock at the same price as institutional investors taking part in the IPO, with a deadline of March 5 to indicate their interest. The company called the share program a way of saying thank you to “redditors who have contributed to making Reddit what it is today.” It said that 8 percent of the total had been set aside for users, but didn’t say how it had decided which users would receive the offer. According to Fortune, Reddit is not the only company to take this approach: Uber and Airbnb both offered some of their users the option to buy shares at the IPO price when they went public, in 2019 and 2020, respectively.
Note: This was originally published as the daily email newsletter for the Columbia Journalism Review, where I am the chief digital writer
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