Reddit Looks to Reward Top Contributors With Its IPO (How's That for Karma?)

If you’re a top Reddit contributor, you may be entitled to a piece of the company. Founded in 2005, Reddit is a social media platform built on users coming together globally to post, vote, and comment in thousands of different interest-based communities.

Perennially one of the top social media platforms with an estimated 850 million monthly users, Reddit is inviting its top users to take part in its initial public offering (IPO). Company brass hopes this move will help build a competitive advantage among other major social media companies like TikTok and Facebook. Pinterest was the last big social media platform to go public back in 2019.

Find out if you’re one of the lucky users to get a piece of the pie and other ways you can participate in the Reddit IPO.

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Reddit filed for its IPO on Feb. 22, announcing their intentions to officially go public.

They plan to set aside shares for purchase by top users based on those users’ karma, which measures a contributor’s reputation and activity on the website.

The platform, however, has not been profitable in almost 20 years. By going public, they plan to continue to build the company with advertising, e-commerce offerings, and data licensing to AI companies.

Originally, Reddit planned to launch its IPO in 2021 but decided to delay in light of the poor economic conditions during the COVID-19 pandemic and other technology stock troubles.

Their productivity and economic status have changed since that initial plan. Compared to the 52 million active users in 2021, Reddit had an average of 73 million daily active users at the end of 2023. Their sales also increased to $804 million — a 21% increase from 2022.

Reddit began sending invitations to top users to participate last week. For a contributor to receive an invitation, they need to meet one of two minimums of site engagement on a multi-tier scale. Around 75,000 user accounts are expected to qualify.

Users either need to meet a minimum threshold for times they’ve taken action as a moderator on a forum (subreddit) or have earned enough “karma” points on the platform.

Spam accounts will not be considered, and the accounts must be in good standing. They do not, however, need to be currently active.

If interested Redditors don’t receive an email invite, they have the opportunity to pre-register for shares between March 1 and March 5. If the program is at capacity prior to March 5, users can join a waitlist program.

The offering will be available to adult U.S. Reddit users who created accounts on or before Jan. 1, 2024. The participants can’t be current or former Reddit employees.

“The invite-only phase gives our ride-or-dies first dibs on pre-registering, while the open pre-registration phase is for all Redditors,” Reddit wrote on its FAQ page.

The initial IPO price is yet to be determined, and the sale is limited to U.S. residents only.

Reddit’s IPO offering will allow thousands of loyal Redditors a chance to become shareholders, but the information regarding the IPO is not financial advice or a recommendation. For those who choose to participate, there is no guarantee of profit.

Users who would like a chance to buy shares can pre-register for the sale here.