Buzz
For years, Reddit users have humorously dismissed the value of karma. Nearly two decades since the platform's inception, those with the highest karma scores are now being offered the opportunity to invest in the company's IPO at the same terms as major institutional investors.
While Reddit presents this as a gesture of gratitude to its dedicated community, it’s difficult to ignore the possibility that the company is also seeking to tap into the viral phenomenon that has previously propelled stocks like Gamestop and Bed Bath and Beyond to unprecedented heights. Indeed, Reddit, the birthplace of meme stocks, is now positioning itself to become one.
Reddit recently reached out to thousands of its most engaged users with invitations to join a Directed Share Program (DSP). If you’re an active—or even former—Reddit user, you might find an invitation waiting in your inbox. However, there are some restrictions: only U.S. residents aged 18 or older are eligible. For further information, visit the Reddit Directed Share Program FAQ page
It’s worth mentioning that r/wallstreetbets, the subreddit that sparked the meme stock phenomenon, isn’t particularly optimistic about Reddit’s prospects. In a recent post, members of the community forecasted a post-IPO decline, drawing parallels to Buzzfeed. Many users discussed shorting the stock and humorously suggested that investing in it would be akin to wasting money. Another post included a meme suggesting the company’s foundation relies heavily on the efforts of unpaid moderators.
I could elaborate further. While r/WallStreetBets isn’t the ideal source for financial guidance, it’s intriguing that the community most synonymous with the meme stock trend is openly mocking Reddit as a poor investment. Perhaps this strategy won’t yield the desired results.
With all that said, is Reddit a good investment? I’m no financial advisor, and I’m not active enough on Reddit to receive an invite, but here’s some context. Reddit has never been profitable in its two-decade history and reported a $90 million loss last year. Its entire value hinges on the contributions of volunteer moderators, many of whom are frequently at odds with the platform’s leadership. While I’ve been wrong before, this situation doesn’t strike me as a market-beating opportunity. I’d opt for an index fund instead—though, admittedly, that’s my stance on most stocks.
