Reddit did not immediately respond to a request for comment for this story.
Unwanted offer
The investment that Reddit offers to its users is known as the Directed Share Program. In both an email and a direct message via Reddit, the company sent a message to initial invitees saying, “Because you've helped make Reddit what it is today, we're offering Reddit ownership at the same price as institutional investors.'' I had the opportunity to become one.”
The program allows users to buy stock at a price set by Reddit's bankers the day before the company's stock begins trading. If there is frenzied interest in the opening of a public transaction, the value of shares purchased the night before the transaction can quickly soar. Users are not subject to any restrictions when selling their shares.
Such IPO purchases are reserved primarily for large investors, such as retirement funds and ETF issuers, who typically tend to hold stocks for long periods of time. If retail investors are involved in her IPO, the price may fluctuate unpredictably as individuals may sell their shares faster.
Companies such as Facebook and Robinhood suffered stock price shocks after they sold an unusually large number of their IPO shares, about a quarter to a third, to individuals. Airbnb had set aside about 7% of his IPO stock for hosts in the home rental market, so it faced fewer problems.
Reddit hasn't announced how many shares it will allocate to users, but it will likely be a limited number. The first rating is given to important contributors, as measured by whether they sit on a company's advisory board or have high Karma, a secretly determined grade of someone's actions on Reddit . The first tier also includes the busiest moderators, who create discussion forums and enforce the rules for posting there.
Additional users will be invited in the coming days with progressively decreasing contributions. Everyone must register his intention to purchase shares by March 5, but there is no obligation to complete the purchase. Starting March 1, all users can attempt to sign up, regardless of activity or moderation history, but some users may be placed on a waitlist.
To be eligible to participate in the Program, you must be 18 years of age or older and reside in the United States. These restrictions have baffled some teenage girlfriend mods and his mods in some other countries. “Redditters based outside of the United States are an equally important part of making Reddit what it is today,” the company wrote in its website's FAQ, citing unspecified regulations regarding geo-restrictions. . “Unfortunately, this is out of our control.”
Cook, a UK-based game modder, says he wouldn't have been tempted to buy the stock even if it were available internationally, but he said Reddit couldn't find a workaround and pursue fairness. He added that not having had the opportunity “didn't give me confidence.”
Former Reddit employees involved in preparing the IPO say backlash from overseas moderators has long been recognized as a pitfall to the plan. Staff also said many moderators were afraid to buy in, thinking it would taint their volunteer work or anger community members by appearing to sell, executives said. told. But Cook saw it differently. Stock, he said, simply isn't what volunteers are looking for in return. “A moderator's 'reward' is to make the community he or she a part of better for everyone,” he says.