Reddit to offer IPO shares to biggest users - report
By Michele Maatouk
Date: Wednesday 21 Feb 2024
(Sharecast News) - Social media firm Reddit is reportedly planning to offer shares in its initial public offering to 75,000 of its biggest users when it hits the market next month.
The Wall Street Journal cited people familiar with the matter as saying that the move is aimed at building loyalty. However, it could backfire if the stock falls in its debut.
Reddit CEO Steve Huffman said at The WSJ 's Tech Live conference in 2021 that he wanted to make any offering more accessible to individuals.
"I want our users to be shareholders, and I want our shareholders to be users," he said at the time.
It was understood that users will have the opportunity to buy the stock at its issue price - an unusual move that is normally preserved for big institutional investors. That investor base is deemed safer as it generally holds the stock for a longer period than retail investors, who are expected to be more likely to sell on weakness.
Reddit filed confidentially for an IPO in late 2021 and is expected to make its documents public later this month and seek to list on the New York Stock Exchange in March. The company achieved a valuation of $10bn in a fundraising round in August 2021, but valuations have shifted since then.
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