Reddit offering shares to top 75,000 users ahead of IPO
Good news for Reddit enthusiasts! The Wall Street Journal has reported that 75,000 of the platform's most active users, will have the chance to buy shares before the firm goes public in 2024. This rare opportunity, usually reserved for big investors, could lead to substantial profits if share prices soar after listing on the New York Stock Exchange (NYSE) in March.
Risks and reasons for offering shares to users
However, there's a flip side: if the stock tanks, it could spark further backlash from Redditors already unhappy with recent company changes. As WSJ points out, individual investors are more likely to sell at the first sign of trouble, which is why banks usually prefer dealing with large money managers. However, Reddit's decision to go public was driven by positive trends, like the WallStreetBets forum drawing in millions of new users and advertisers.
Drew Vollero's role in Reddit's IPO
In December 2021, Reddit announced its initial public offering (IPO), just nine months after Drew Vollero took charge as Chief Financial Officer. Vollero previously helped Snap with its IPO, which ended a tech IPO dry spell and saw share prices jump 44% on day one. Despite Snap's stock later experiencing ups and downs, Vollero's experience likely appealed to Reddit as it planned to go public.
Reddit's goal for user shareholders
Reddit has long wanted its users to become shareholders. In a blog post, the company expressed its goal of making its stock offering more accessible to individual investors. At a 2021 tech conference, Reddit CEO Steve Huffman said, "I want our users to be shareholders, and I want our shareholders to be users." Huffman believes that by inviting users to become stockholders, Reddit can help create a more fair and accessible market for individual traders using platforms like Robinhood.
