Reddit IPO: Plans to sell worthless shares to worthless users

Reddit plans to place a big chunk of its IPO shares in the hands of its users, an unusual move that could build loyalty but also comes with risk.

The company plans to reserve an as-yet-undetermined number of shares for 75,000 of its most prolific so-called redditors when it goes public next month, according to people familiar with the matter. The users will have the opportunity to buy Reddit shares at its initial public offering price before the stock starts trading, a privilege normally reserved only for big investors.

Ideally for the company and its underwriters, Reddit shares will rise in their stock-market debut, bestowing big gains on those who buy in at the IPO price. If the stock falls, however, it could anger those members of Reddit's community—a group that, broadly speaking, hasn't shied away from boycotts in the past.

Would you buy shares in Reddit's IPO? Why or why not? Join the conversation below.

Banks generally favor selling the bulk of an IPO to big money managers that tend to hold stocks for a relatively long time. Individual investors are viewed as more fickle and prone to selling at the first sign of weakness.

Actual WSJ link if any rich !clinklickers with a subscription want to check the comments and post some screenshots, but I assume they're boring.

This is a of the highest order, but it's also quite a move from the Chadmins. Somebody was sitting around in a meeting thinking, "Who would be dumb enough to buy reddit stonks?" and then of course the answer was right there in front of them: