Ahead of Reddit’s initial public offering (IPO) of its stock this week, users of the platform are fretting about how it might change the site—while also discussing how to get in on the action early.
Last month, Reddit announced it was letting eligible users and moderators buy stock early alongside institutional investors after the company decided to go public. Pre-registration for that program, called the Directed Share Program (DSP), closed on March 5th.
Invites to the DSP are being sent out on a rolling basis to mods and users based on numerous aspects including karma they’ve acquired from posting.
As soon as the program was announced though, backlash started, with Redditors talking about their skepticism for what the change might mean for the platform.
“Reddit’s continuing to follow through with the ‘enshittification’ that will lead to its doom,” posted u/JapanStar49 on r/Reddit_IPO. “I think we’re getting closer to the ‘abuse those business customers to claw back all the value’ step[.]”
And with shares expected to start trading on Thursday, according to Reuters, discussion about what going public means for the website has picked up pace.
On r/Technology on Wednesday, Redditors discussed a Guardian op-ed by Hussein Kesvani asking if Reddit was “about to become rubbish.”
“become? has the author of the guardian been in a coma the last 5 years?” asked u/reaper527. “the only reason everyone is here still is because there isn’t a viable alternative yet[.]”
“The newer algorithms are trash,” added u/tgt305. “Used to be able to revisit hot posts throughout the day but now it gives newer posts more weight and hides ones you’ve already seen even if they get more popular later in the day. It’s trying to keep it fresh for the dopamine hits but it’s the frequently commented on posts that I used to enjoy. Everything is primed for effective ads, nothing else.”
According to an SEC filing by the company, 98% of Reddit’s revenue in 2023 came from its ads business, reported Marketing Brew, with investment scaling up “meaningfully” in 2018.
Ad buyers who talked with Marketing Brew say the platform isn’t as effective as other social media sites, but they do think it can be an effective place for contextual advertising aimed at specific communities.
Worries about advertising affecting the user experience arose last year when the site removed API access for third-party developers. That led to mass blackouts of subreddits in protest of the move.
News in February that Reddit signed a deal with an unnamed AI company to train its model on Reddit content also led to users discussing ways they could undermine the training data, including by posting incoherent and bizarre posts.
And with a filing on Wednesday announcing that Reddit stock had been certified by the New York Stock exchange, subreddits like r/Reddit_IPO, r/RedditIPO, and r/RedditCreddit were buzzing with users waiting for the next step in the buying process.
According to posts on the subreddits, Reddit’s DSP is requiring ETrade accounts to get in on the early purchasing, with the company expecting shares to trade for between $31 and $34 a pop.
“I was surprised to get the invite for this IPO and this is a little outside of my normal investment box, but I’ve been on Reddit for a long time and it seems like a fun opportunity. I’m thinking like $5K. What’re the rest of you guys thinking on this?” asked one redditor in a thread titled “How much are y’all buying?”
And while plenty of people seem interested in throwing a little money in, confidence isn’t exactly rock-solid.
“30 shares, enough to give myself a shot of dopamine but not enough to ruin me if it falls like a rock,” posted u/trustjosephs.
“I’m just going to do 10 shares. Just to experience the process,” posted u/FormicaDinette33.
And u/larry1186 summed up the thinking of a lot of Redditors who were willing to put a toe in the water: “A comfortable amount I’m okay with never seeing again.”
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