It was almost a month ago when we first announced Reddit’s plan to offer its most dedicated users shares in its upcoming initial public offering (IPO). However, this news was not taken well by the Redditors, who were offered an advance piece of that action, and for a reason you might not expect. It was something of an eye-opener when the social media platform announced its plan to open up a portion of the IPO to some of its power users. These Redditors, as they’re known, would have the opportunity to buy in advance of the general public. However, most of those Redditors are turning down the opportunity.
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Why? Because said Redditors are still smarting over recent management issues that led to restrictions on how the site could be used. One Redditor, Sarah Gilbert—who moderates the r/AskHistorians section of the site—noted that it wasn’t so much that Reddit was “giving back,” but rather, that it was “…maybe…asking for even more.”
Losing Out on Principle?
Gilbert’s projection isn’t out of line—it could certainly feel like Reddit is demanding more out of its top users with, at best, an uncertain promise of future reward later—Gilbert and those like her are deliberately losing out. After all, noted TastyLive CEO Tom Sosnoff, Reddit has real potential to benefit as “…the only tradeable pure social media app.”
This is true; consider the alternatives in the field, and you’ll discover that the tradeable ones have side hustles, and the pure ones aren’t really tradeable. But then, there might be a good reason for this, as Meta Platforms (NASDAQ:META) discovered.
What Is the IPO ETF Forecast?
Reddit isn’t trading yet, but we can look at the Renaissance IPO exchange-traded fund (ETF) (NYSEARCA:IPO) to see how recent IPOs are performing. Over the last five trading days, shares have actually been on the rise. Not by much, certainly—an extra 2.2% over the period—but it has been a fairly steady upward march.
