Reddit users have long joked about how worthless karma is. Now, almost 20 years after the site was founded, the people with the most karma are being invited to participate in the company’s IPO at the same price as institutional investors.
Reddit is framing this as a way to reward loyal users, but it’s hard not to suspect the company is also betting this can earn themselves a little bit of the meme magic that drove up so many stocks in the past few years. That’s right: Reddit, the website that brought you meme stocks like Gamestop and Bed Bath and Beyond, is trying to become a meme stock itself.
The company recently messaged thousands of its most active user with invites to a Directed Share Program (DSP). If you are—or even were—an active Reddit user, there might be an invitation in your Reddit inbox right now. There’s a few caveats to the offering. Only residents of the United State of America can participate, for one thing, and you need to be at least 18 years old. You can read more details on the Reddit Directed Share Program FAQ page.
It should be noted that r/wallstreetbets, the subreddit where the whole meme stock thing happened, isn’t exactly enthusiastic about Reddit’s potential. In a recent post, users of that community predicted the stock would tank after the IPO, comparing it to Buzzfeed. Commenters users talked about shorting the stock and joked that anyone who invests in the stock is throwing their money away. Another post features a meme implying that the entire company is built on the backs of volunteer moderators.
I could go on. I don’t think r/WallStreetBets is where you should be looking for investment advice, but it’s interesting that the Reddit community most closely identified with the meme stock movement is actively joking about Reddit being a terrible investment. Maybe this gambit won’t work.
Having said all that, should you invest in Reddit? I’m not a financial expert and I’m not nearly active on Reddit enough to get an invite, but here’s some context. Reddit has never once turned a profit in its 20-year history and lost $90 million last year. The entirety of its value is built on the work of volunteer moderators, many of whom are routinely in open revolt against the site’s owners. I’m wrong about a lot of things, but that, to me, doesn’t seem likely to beat the market. I’d put the money in an index fund instead—but, to be fair, that’s what I’d say about any stock.