Reddit announces IPO and distribution to users

The most active users and moderators of the Reddit social network will have the opportunity to receive the products of the company, which after many years of testing, has filed its application with the United States Securities and Exchange Commission (SEC), under the name RDDT, for an initial public offering (IPO).

With the news, the company warns of those high volatility that will be generated in the price of the shares as its users are those who have the opportunity to buy them, because it increases the risk of price fluctuations. The above is what happened with other platforms such as GameStop and AMC Entertainment, which also allowed their users the opportunity to buy shared products, and then experienced a shortage trust.. The above are called “meme actions.”

Don’t fall into it pulse

Given this, Reddit reports from the public put the post that the case of “meme stocks” have been attributed to “strong and atypical interest from stock markets, including those that will be presented on financial markets and other social media and online forums such as r/ wallone of us subreddits“.

“We hope that the IPO will continue to contribute important benefits to our community. Our users feel a deep sense of ownership of the community they create on Reddit. That sense of ownership often extends to all of Reddit,” said the company’s CEO, Steve Huffman.

For users who want to invest, The company has established six levels, based on the reputation score and its practices. As explained by the Spanish media Cinco Días, the 1st level has priority in the purchase, and if these are not sold, the following levels will receive them, this is important.

“We want this sense of ownership to reflect true ownership: for our users to become our owners. Being a listed company makes it possible. With this in mind, we are happy to invite users and observers who have helped Reddit to buy shares in our public offering, as well as our investors,” said Huffman.

FILE PHOTO: The Reddit app is seen on a mobile phone in this example, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

As noted by Reddit in the public offering prospectus, Its portal has 73 million daily users, plus 100 thousand active communities. The SEC filing also explains that it The revenue in 2023 is US$ 804 million, which means an increase of 20% compared to 2022. Reddit is sure that a significant part of its profit comes from online advertising on its website and its mobile application.

Reddit joins the group of social networks that are already listed in the market, such as Meta (Facebook, Whatsapp and Instagram), Pinterest and Snapchat. Although since 2019 the social network has not entered the Stock Market, after the Pinterest IPO.

Just last year, Meta reported a profit of US$ 39,098 million, an increase of 68% compared to 2022. Although it should be noted that the company has not made the same practice of reservation for its own users.

Meanwhile, Snapchat’s IPO was launched in 2017, and the platform is valued at US$3 billion.

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