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A lot of Redditors hate the Reddit IPO
(www.theverge.com)
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this post was submitted on 25 Feb 2024
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My guess is that they're offering early sales because they predict that the stock value will tank after the public offering, so this way there's a slightly higher margin of profit for the current shareholders. If that's correct then it's completely scummy. (i.e. extremely typical for Reddit)
Another possibility is that they're trying to "force" power users to be more cooperative towards the platform, by giving them a financial incentive to do so - "if you shit here you'll be tanking your own shares".
Stock options: "if you make the thing work, you'll be able to cash in on the stock price increase"
Pre-sale: "pay us now, find about later"
One incentivizes cooperation, the other can be a way to get support from large investors to grow a new business... or a scam to cash out from a 19 year old unprofitable one.
Nothing like investors who they perceive will be less rational, and will buy / not sell at a price above what the fundamentals suggests is rational.
It could pay off for Reddit if they get a short squeeze - non-institutional investors might be slower to sell, and I bet a lot of people will be shorting the stock unless the IPO price is really low.