For Redditors who deal with buying and selling like trolling, Reddit’s IPO might be the last word meme

As Reddit lastly files to go public, the corporate wrote in its S-1 filing that “meme stock” schemes on r/WallStreetBets may pose a threat to buyers.

The subreddit r/WallStreetBets, a group of retail merchants with 15 million members, describes itself as being “like 4chan found a Bloomberg Terminal.” It’s most well-known for coordinating a short squeeze on GameStop inventory in 2021, a rebellious transfer that value hedge funds billions of {dollars}. The inventory was so unstable, leaping greater than 600% inside days, that buying and selling was halted a number of occasions. Retail merchants tried to duplicate the GameStop saga by investing in different closely shorted shares like AMC and Mattress, Bathtub & Past, solidifying this phenomenon of buying and selling “meme stocks,” to combined outcomes.

In its S-1 submitting, the corporate wrote: “Given the broad awareness and brand recognition of Reddit, including as a result of the popularity of r/wallstreetbets among retail investors, and the direct access by retail investors to broadly available trading platforms, the market price and trading volume of our Class A common stock could experience extreme volatility for reasons unrelated to our underlying business or macroeconomic or industry fundamentals, which could cause you to lose all or part of your investment if you are unable to sell your shares at or above the initial offering price.”

For Redditors who deal with retail investing like a type of web trolling, Reddit’s IPO might be the last word meme. The corporate additionally wrote in its IPO submitting that it’ll invite Reddit customers and moderators to purchase inventory in its directed share program. This can be a uncommon transfer that will let group members purchase inventory on the identical value as institutional buyers upon IPO. Members will likely be granted precedence based mostly on their karma, which is a manner of measuring group contributions on Reddit.

However yet one more threat issue for buyers is that Reddit “may not be able to achieve or maintain profitability in the future,” it writes within the S-1. Regardless of its prominence in web tradition, Reddit has failed to show a revenue. In 2023, Reddit incurred a internet lack of $90.8 million, including to the corporate’s cumulative deficit of $716.6 million.