The Public Offering of Reddit: How Social Media Has Changed Its Presence, Its Shares, and How It Will Impact GameStop
Digital ad spending on social media platforms has slowed down due to the economic downturn. 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 biggest data sets of human beings talking about interesting things,” he told NPR. “We are not in the business of giving that away for free.”
Reddit, the San Francisco social media site that describes itself as “the front page of the internet,” filed for an initial public offering on Thursday, reflecting the tech company’s aim of expanding its presence and profile.
The changes include the decision to charge some developers access to the site. The change killed off third-party apps and angered thousands of communities on Reddit, which caused them to boycott the site. Critics argued that the policy shift was a way to move users away from third-party apps.
The Wall Street trading frenzy that followed the sudden surge in the stock of videogame retailer GameStop was caused by a group of small investors who made use of a meme known as WallStreetBets.
The most noxious content on the site needs to be reined in but it’s still up to the subreddits to make the final decisions about what’s allowed on the site.
Many of the so-called subreddits in the world of social media have grown popular by allowing the communities to govern themselves, something that has caught on in the crowded world of social media.
As the CEO, he has increased his shares to 3.3 percent of the site. Ohanian said in a separate X post on Thursday that he still has some shares from when he was executive chair of Reddit about a decade ago.
The company said in its filing that they would assign each participant a tier based on their contributions, but they did not state how many shares would be set aside for prolific users.
The company will allow top users to purchase shares in the initial public offering. During the stock market premiere, companies usually offer up their stocks to institutional investors.
Advance Publications, which owns Condé Nast, is Reddit’s largest shareholder, Reddit’s filing shows. The No. 2 shareholder is Chinese tech company Tencent. Sam Altman, the CEO of ChatGPT maker OpenAI, is Reddit’s third-largest shareholder, according to the filing.
The site was launched in 2005 by Ohanian and his roommate, Steve Huffman, and was intended to be a gathering place for anonymous conversation about culture and politics. Over the years, its userbase has grown, with now 76 million people visiting the site daily across more than 100,000 communities, 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 haven’t spoken in a while. 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.
There were no responses to requests for comment from Ohanian and Reddit. In a post on X on Thursday, Ohanian, who now runs venture capital firm SevenSevenSix wrote, “Pretty wild seeing $RDDT going public after all these years. Founders, keep going.”