Last month, Reddit gave its 75,000 power users an initial stake in the stock before the company goes public later this year.
It may be on Reddit Threw Although the move was covered in a “special show,” general opinion within the Reddit community indicates that it was received mixedly.
“I've been asked to participate in an IPO, but I won't take that risk,” one Reddit user wrote. “The user base isn't worth the investment.” Another offered a contrasting opinion, saying that the Reddit community relies on Reddit's results for quality answers, while at the same time relying on the quality of its content. He also pointed out that he disagreed.
RELATED: Reddit co-founder Alexis Ohanian says 'surfer mindset' is the 'right' approach to business and life.
Still, some consider Reddit a “meme stock,” a term ironically coined by the platform.
The 15 million members of the subreddit r/WallStreetBets have previously influenced the stock market by manipulating underperforming stocks and “meme stocks,” including GameStop and financial institutions. caused billions of dollars in losses.
Reddit sent a DM to my Reddit account asking me to buy shares in the IPO
Meme Stock's Meme Est has arrived pic.twitter.com/lXdM6Xl210
— Jeremiah Johnson ? (@JeremiahDJohns) February 22, 2024
But some investors think Reddit is a good bet.
“I just want to invest in a search engine because I think it's a good investment,” Jillian Tahajian, a 24-year-old marketing analyst, told TechCrunch. “Google is too expensive and Pinterest is a failure.”
The deadline to pre-register for Reddit shares arrives this week for the 75,000 users Reddit has chosen to invite. According to an S-1 filing filed by Reddit with the SEC in preparation for its initial public offering, Reddit users who have contributed significantly to the community will be given priority in pre-registration. Reddit made its selection by considering users' “karma points,” which measure how much a user's actions contribute to the Reddit community, and the actions of moderators.
Related: Spirit Airlines is the latest meme stock to jump 131%
Reddit, which describes itself as the “front page of the Internet,” was founded in 2005 by Alexis Ohanian, Aaron Swartz, and Steve Huffman. The platform gives its users the power to manage their posts and communities, and they contribute fully to the platform's success. Last year, the website was able to be disabled due to administrative changes.
CNBC sources say Reddit could be seeking a valuation of $6.5 billion.
According to data from Semrush's traffic analysis tool, Reddit became the third most visited website in the US in December 2023, surpassing Facebook by about 535 million times. Twitter, Instagram, and TikTok were ranked 10th, 13th, and 17th, respectively. According to Semrush, globally Reddit is in his 9th place, with its traffic numbers exceeding his TikTok and WhatsApp, but below Facebook, Twitter, and Instagram.
Related: Netflix documentary 'Eat the Rich: The GameStop Saga' tells the story of the meme stock that cost Wall Street $20 billion
According to Reddit's SEC filings, the company had 267.5 million weekly active users, more than 100,000 active communities, and 1 billion total posts. The company posted a net loss of $90.8 million last year and was unprofitable, but plans to return to profitability through “advertising, monetizing commerce on its platform, and licensing data,” according to the filing.
Additionally, the filing shows that Reddit currently derives 98% of its revenue from advertising.
Reddit signed a $60 million deal with Google in February to allow the company to train AI models on Reddit posts.
