Reddit Also Wants to Become a Meme Stock
Reddit users have long joked about how useless karma is. Now, almost 20 years after the platform was founded, people with the highest karma are invited to participate in the company’s IPO at the same price as institutional investors.
Reddit sees it as a way to reward loyal users, but it’s hard not to suspect that the company is also betting that it could cash in on some of the meme magic that has driven so many stocks higher over the past few years. That’s right: Reddit, the website that features meme stocks like Gamestop and Bed Bath and Beyond, is trying to become a meme exchange itself.
The company recently sent thousands of its most active users invitations to the Directed Share Program (DSP). If you are or have even been an active user of Reddit, you may have an invite in your Reddit inbox right now. There are several caveats to the proposal. First, only residents of the United States of America can participate and you must be at least 18 years old. For more information, please visit the Reddit Directed Share FAQ page .
It should be noted that r/wallstreetbets, the subreddit where this whole meme thing happened, isn’t excited about Reddit’s potential. In a recent post, users of this community predicted that the stock would fall after the IPO, comparing it to Buzzfeed. Commenters talked about shorting stocks and joked that anyone who invests in stocks is throwing away their money. Another post includes a meme implying that the entire company is built on the shoulders of volunteer moderators.
I could go on. I don’t think r/WallStreetBets is where you should look for investment advice, but it’s interesting that the Reddit community most closely associated with the meme stock movement is actively joking about how Reddit is a terrible investment. This gambit may not work.
Having said all that, is Reddit worth investing in? I’m not a financial expert and I’m not active enough on Reddit to warrant an invite, but here’s some context. Reddit has never made a profit in its 20-year history , and last year it lost $90 million . All of its value is based on the work of volunteer moderators, many of whom regularly rebel against the site’s owners. I’m wrong about a lot of things, but I don’t think this is likely to beat the market. I’d put the money into an index fund instead, but honestly, I’d say the same about any stock.