Reddit aims to revolutionize the digital age: Forming a better social media empire through the eyes of a public user base
Reddit (along with peer social media platforms Facebook, Instagram, Snap, YouTube and others) has been dealing with a slowdown in digital ad spending. That, in turn, has pressured the companies to find new ways to generate revenue, something that became particularly pressing ahead of its IPO.
“Reddit is one of the largest data sets of humans talking about interesting things, and it’s one of those things that you’ll find a lot on this website,” he said. “We are not in the business of giving that away for free.”
In a letter that accompanied its regulatory filing, Huffman, Reddit’s CEO, said he hopes going public will benefit the site’s community, along with investors. “Our users have a deep sense of ownership over the communities they create on Reddit,” Huffman wrote.
Among the changes was Reddit’s decision to charge some developers for access to the site. The move sparked a boycott among thousands of Reddit communities angered that the change would kill off third-party apps many use to read and post on the site. Critics argued the policy shift was an attempt to move users toward Reddit’s own app and away from third-party apps.
The stock market was thrown into turmoil when a group of people on the internet known as WallStreetBets helped organize small investors and sent the stock of videogame retailer GameStop soaring to extraordinary highs.
This laissez-faire approach has proven divisive. Fans of unfettered free speech have cheered the lack of centralized rules and enforcement at other platforms. But critics have chided Reddit for allowing online communities to spring up with toxic material, including harassment, racism and the leaking of private celebrity photos.
In a crowded world of social media, Reddit has grown popular by allowing the people to govern themselves, by amassing large, ardent followers to many of its so-called subreddits.
At the end of March, it is expected that the official pitch will be launched to investors and a price for stock will be announced.
The company also said it is setting aside stock to individual investors through brokerage apps like Robinhood. The users picked will be based on the site’s “karma,” which it uses to determine a user’s reputation.
Top users will be able to purchase shares in the initial public offering, which is also called an IPO. Typically, companies offer up stocks mostly to institutional investors during a stock market premiere.
Advance Publications, which owns Condé Nast, is Reddit’s largest shareholder, Reddit’s filing shows. The company with the second-largest stake is a Chinese tech company. According to the filing, the CEO of OpenAI, Sam Altman is the third-largest shareholder.
Founded in 2005 by Alexis Ohanian and his dorm mate at the University of Virginia, Steve Huffman, the site started as an gathering place for anonymous banter and commentary on culture and politics. 76 million people visit the site daily across more than 100,000 communities as a result of the growth of its userbase, according to its filing to regulators.
Huffman, who has been Reddit’s CEO since 2015, and Ohanian, who after stepping back from helping run the business had sat on its board for years, split in 2020 over how to handle some of the hateful content on Reddit. They’ve spoken little since. The lack of a nod to Ohanian in the new document could reflect both that schism and Huffman’s attempt to cast a company that’s been around for 19 years in a new light.
Requests for comment were not immediately responded to by Ohanian or Reddit. In a post on X, Ohanian wrote, “We were pretty crazy seeing $RDDT going public after all these years.” Founders, keep going.”
