Reddit held an IPO

We'll tell you how the Reddit IPO went and how the crypto community reacted to the long-awaited placement of the company's shares.

What we know about the Reddit IPO

Reddit is a platform that combines the features of a social network and a forum. The site was launched in June 2005 by Steve Huffman, Aaron Schwartz and Alexis Ohanian.

The Reddit team has been preparing for an IPO (initial public offering) since 2021. In 2024, the company finally managed to realize its plans. Here's what you need to know about the Reddit IPO:

• The start date for trading in Reddit shares is March 21, 2024.
• Reddit's securities will trade on the NYSE under the ticker symbol RDDT.
• The shares were placed at $34 per share with a total placement volume of $748 million. A total of 22 million shares were put up for sale.
• Reddit's IPO valuation was $6.4 billion, down $4 billion from 2021. Let us remind you that the company expected to carry out the placement at a valuation of $15 billion.
• The main shareholders were Advance Publications, the parent company of Condé Nast (New Yorker, Vogue, Wired), and the Chinese Tencent. Steve Huffman maintained 3.3%. The Reddit team distributed part of the shares among the platform moderators.
• Reddit's IPO was the social network's largest initial public offering in several years.

The Reddit team will be able to use the funds from the sale of shares to generate new sources of income, as well as strengthen its position in the market as a provider of data for training artificial intelligence models. Let us recall that in March 2024, the American Federal Trade Commission (FTC) had questions about the platform’s data licensing methods. Reddit also faced claims from Nokia Technologies. Company accuses platform in patent infringement.

Crypto community Reddit

Reddit is closely connected with the crypto community, for many of whom the platform has become a second home. The company invests in cryptocurrency and supports the development of the crypto industry.

Reddit has many subreddits where investors, including representatives of the crypto community, gather. The size of such groups can be judged by the influence they have on the market. For example, in 2021, investors on Reddit declared war on Wall Street bankers who made money by shorting the shares of a number of companies. The online broker Robinhood suffered, among other things, from the actions of platform users.

Some subreddits have their own cryptocurrency: r/Cryptocurrency has Moons, r/FortniteBR has BRICKS, and r/ethtrader has DONUT. The coins were released as part of the Community Points rewards program, which was launched in 2020 and ended in 2023. The goal of the initiative was to reward platform users for creating quality content and active participation in the life of the community. Nevertheless, the coins remained on the market.

All three cryptocurrencies – Moons, BRICKS and DONUT – reacted to the news of the Reddit IPO with growth.

It can be assumed that the price of Reddit shares will influence the price of the subreddits' cryptocurrency.

Co-founder of venture capital company Morgan Creek Digital Anthony Pompliano warned subscribers about the appearance on the market of a Reddit coin, which in fact has nothing to do with the platform. Despite the lack of direct connection with the platform, the cryptocurrency also showed positive dynamics against the backdrop of news about the IPO. Pompliano warned subscribers against investing in unverified tokens, as the price of such speculative coins could quickly drop to zero and investors would lose all their money.