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Jeremiah Johnson says<\/span> he has \u201can embarrassing amount\u201d of Reddit karma. So, as a longtime moderator of subreddits like r\/economics, he was part of a select group of power users who were granted first dibs to buy stock in Reddit as the company prepares to go public.<\/p>\n \u201cYou would never see Instagram doing something like this,\u201d Johnson told TechCrunch. \u201cBut on Reddit, so much of the content is driven by Redditors and unpaid moderators. If any site was going to do it, they would be the one.\u201d<\/p>\n It\u2019s not normal for social media companies to give users the same privilege as institutional investors, but Reddit has set aside shares in its IPO to sell to 75,000 devoted community members. Potential investors are given priority based on their amount of karma, which is a metric Reddit uses to measure a user\u2019s contribution to the site. Some people rack up karma after many years of dedicated posting; others can have one post go viral and become rich in karma, which has been pretty useless until now.<\/p>\n When deciding whether or not to buy into Reddit\u2019s IPO, users aren\u2019t just weighing the normal investment considerations, like whether or not Reddit can eventually turn a profit. They\u2019re also wondering if Reddit could be the next meme stock, which could prove lucrative or disastrous.<\/p>\n Communities on Reddit like r\/WallStreetBets have left a lasting impact on the stock market, to the point that Reddit formally listed the community as a risk factor in its S-1 filing<\/a>. With over 15 million members, r\/WallStreetBets coordinated a short squeeze<\/a> on GameStop stock in 2021, a rebellious move that cost hedge funds billions of dollars. Retail traders have also manipulated the prices of low-performing stocks like AMC and Bed Bath & Beyond, dubbing them as \u201cmeme stocks.\u201d<\/p>\n Gillian Tahajian, a 24-year-old marketing analyst, thinks that getting in early on a meme stock could be a boon.<\/p>\n \u201cI see [Reddit] as a GameStop stock,\u201d she told TechCrunch. \u201cI think there\u2019s too large of a loyal base that will buy and never sell.\u201d<\/p>\n Tahajian only joined Reddit last month, but now, she scrolls the platform nightly to catch up on reality TV gossip \u2013 and once she\u2019s up to date on \u201cLove is Blind\u201d cast drama, she peruses personal finance subreddits. Though she wasn\u2019t invited to invest early, she plans to buy stock in Reddit once it officially goes public.<\/p>\n It\u2019s not just the meme potential that draws her in, though. Tahajian wants to invest in Reddit because she sees its potential as a search engine. It\u2019s becoming common<\/a> for people to tack on \u201cReddit\u201d to the end of their Google searches, since Google has become overrun with low-quality<\/a> results.<\/p>\n \u201cI want to invest in a search engine anyways, because I think it\u2019s a good investment to have,\u201d she said. \u201cGoogle is overpriced, and Pinterest is failing me.\u201d<\/p>\n Redditors are famously committed, but the company\u2019s relationship with its most devoted users has been strained in the last year. Reddit alienated many of its communities, known as subreddits, with sweeping API changes<\/a>, making access to API so expensive<\/a> that some beloved third-party apps had to shut down. In protest of the changes, more than 8,000 subreddits went dark<\/a>, making parts of the site virtually unusable.<\/p>\n As Reddit goes public, Johnson sees Reddit\u2019s offer for users to invest early as an olive branch.<\/p>\n \u201cReddit is really dependent on power users who moderate the site, and because they\u2019ve given those power users actual power, power users did for a day or two literally make the site unusable,\u201d Johnson said. \u201cReddit is just structurally more dependent on their power users than any other social media site, and I think that tells you why they\u2019re doing this, and why no other social media site would.\u201d<\/p>\n Johnson said he plans to take Reddit up on its offer to invest early, but he\u2019s motivated by the ability to chronicle the experience for his newsletter<\/a>, rather than for the potential returns.<\/p>\n Max Spero, a startup<\/a> founder in his twenties, plans to buy Reddit stock post-IPO because he\u2019s a fan of the platform, which he\u2019s been using for 11 years. One of his favorite Reddit communities is r\/breadit, a subreddit devoted to bread-making, but he\u2019s also an avid Magic the Gathering player who spends time in r\/magictcg.<\/p>\n \u201cI think Reddit is a really great website \u2013 despite the negative-on-average community, it\u2019s one of the few places on the internet where community opinion is so clearly organized, and thoughtful discussion happens,\u201d Spero told TechCrunch. \u201cWith that being said, I\u2019m not sure how much larger Reddit can grow.\u201d<\/p>\n Reddit has to gain a lot of ground to become profitable, but the company said in its IPO that it still has potential to make more money on ads. Reddit is also licensing data<\/a> to Google, which will pay $60 million per year to use its content to train large language models. Though the platform\u2019s global daily active users (DAUs) increased by 27% last quarter alone, it\u2019s still surprisingly small with 73.1 million DAUs. That\u2019s less than half<\/a> as many as X (formerly Twitter), for comparison.<\/p>\n Amit Kukreja, a stock market YouTuber<\/a> who uses Reddit, doesn\u2019t have such high hopes for Reddit\u2019s IPO.<\/p>\n \u201cInviting people to be investors is fine, but once I found out that they were listing r\/WallStreetBets as a risk<\/a>, I thought that was a \u2018f\u2014 you\u2019 to the user,\u201d he told TechCrunch. \u201cWhat would\u2019ve been really cool is if they gave users free shares \u2013 Sam Altman<\/a> or one of the main VCs could\u2019ve taken out even 0.2% of their shares [for users].\u201d<\/p>\n As far as stocks go, Reddit could be the biggest meme yet. For people like Kukreja, who doesn\u2019t plan to invest in the IPO, the threat of volatile stock shenanigans is a deterrent. But Johnson sees buying Reddit stock as a \u201crational prediction of irrationality.\u201d<\/p>\n \u201cRegardless of whether or not this technically makes sense, if this is a thing that\u2019s going to happen, you might as well get in,\u201d he said. \u201cThis might just be the next meme stock.\u201d<\/p>\n \u00a0<\/p>\n<\/p><\/div>\n