Last month, Reddit gave 75,000 power users the right to access shares before the company goes public later this year.
Although Reddit might have done it acute Considering the move as a “special program”, popular opinions within the Reddit community show that reception was mixed.
“I was asked to participate in the IPO and I will not take that risk,” one Reddit user wrote. “It’s not worth investing in the user base.” Another presented a mixed opinion, pointing out that the Reddit community relies on Reddit results for quality answers, while disputing the quality of that content.
Related: Reddit co-founder Alexis Ohanian says the ‘surfer mentality’ is the ‘right’ approach in business and life.
However, others have considered Reddit a “meme stock”, a term that ironically originated on the platform.
The 15 million members of the r/WallStreetBets subreddit have already had an impact on the stock market by manipulating low-yielding stocks or “meme stocks,” with GameStop being one example and costing institutions billions of dollars in losses.
Reddit just sent my Reddit account a direct message asking me to buy shares in their IPO
The greatest of memes has arrived pic.twitter.com/lXdM6Xl210
— Jeremiah Johnson? (@JeremiahDJohns) February 22, 2024
Some investors, however, consider Reddit to be a good bet.
“I still want to invest in a search engine because I think it’s a good investment,” Gillian Tahajian, a 24-year-old marketing analyst, told TechCrunch. “Google is too expensive and Pinterest is letting me down.”
This week comes the pre-registration deadline for Reddit Actions for the 75,000 users Reddit has chosen to invite. According to Reddit’s S-1 filing with the SEC, which the company filed to prepare for its initial public offering, Redditors who contributed substantially to the community were given preference to pre-register. Reddit has considered a user’s “karma points”, which measure the contribution of his actions to the Reddit community and the actions of moderators in making his choices.
Related: Spirit Airlines is the latest meme stock amid a 131% spike.
Reddit, which calls itself “the front page of the Internet,” was founded by Alexis Ohanian, Aaron Swartz, and Steve Huffman in 2005. The platform gives community posting and moderation power to users, who are quite instrumental to the success of the platform since they managed to bring the site down last year in response to administrative changes.
According to a CNBC source, Reddit could seek a valuation of $6.5 billion.
Data from Semrush’s Traffic Analytics Tool reveals that Reddit was the third most visited website in the United States in December 2023, beating Facebook by approximately 535 million views. Twitter, Instagram and TikTok placed 10th, 13th and 17th respectively. Globally, Reddit ranks 9th according to Semrush, which puts its traffic numbers above TikTok and WhatsApp, but below Facebook, Twitter and Instagram.
Related: Netflix Documentary ‘Eat the Rich: The GameStop Saga’ Explains the Meme Stock Saga That Cost Wall Street $20 Billion
Reddit’s SEC data reveals that the company had 267.5 million weekly active users, more than 100,000 active communities, and a total post count of 1 billion. The company was unprofitable last year, with a net loss of $90.8 million, but plans to become profitable through “advertising, monetization of platform commerce and licensing data,” according to the filing.
The document also shows that Reddit currently generates 98% of its revenue through advertising.
Reddit inked a $60 million deal with Google in February that allows the company to train its AI models on Reddit posts.