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Reddit community benefits from highly successful IPO

Published: Sep 2025
Treasury Today Adam Smith Awards 2025

Judges’ Choice

Overall Winner

Reddit

Sunny Gutta

Director, Treasury
Reddit logo

USA

Founded in 2005, Reddit is home to thousands of communities known as “subreddits” where its users “redditors” connect over shared interests and participate in discussions.

The challenge

Reddit’s IPO was the result of a multi-year process aimed at achieving several objectives: allowing its users to become shareholders, providing liquidity for employees and ensuring broad investor participation. Despite challenging market conditions in 2024, Reddit’s unique community‑driven platform and strong user engagement set it apart, making it an attractive investment opportunity.

The solution

Sunny Gutta, Director, Treasury, Reddit
Sunny Gutta, Reddit

Reddit’s IPO, priced on 20th March 2024, marked a major milestone for the company and involved a series of strategic initiatives and careful coordination. Reddit successfully raised US$860m by offering 25.3 million shares at US$34 per share, which was at the high end of the expected range. The IPO was very successful, with the stock closing at US$50.44 on the first day of trading, reflecting a 48% increase from the IPO price.

One of the significant initiatives was the Reddit Directed Share Programme (DSP), managed by the treasury team. This programme aimed to involve the Reddit community and key stakeholders in the IPO process by reserving up to 8% of the shares offered in the IPO for users, moderators, and friends and family of certain employees. This initiative rewarded the community for their contributions and fostered a sense of ownership among Reddit’s most dedicated users.

Additionally, the treasury team worked with retail-focused brokerages to offer shares to retail investors, providing them with curated access to the IPO. This ensured a broad range of investors had the opportunity to participate in the IPO. A key feature of the IPO was allowing a large number of employees to sell shares to realise liquidity for personal needs. This required significant coordination among Reddit, legal teams and the underwriters led by Morgan Stanley.

Approximately 1,300 Reddit employees opted to sell their shares, setting a record for the number of selling shareholders in an IPO. The process involved thorough KYC documentation, sanctions screening, adverse media screening and internal reviews to ensure compliance and smooth execution.

The Reddit team also developed a comprehensive plan for managing Restricted Stock Units (RSUs). The team recommended vesting the RSUs on the IPO date, which matched the share price used to calculate the tax liability associated with the RSUs to the IPO price. This approach was important to reduce the overhang associated with potential future sales of RSUs post-IPO, which could have depressed the share price.

An essential part of Reddit’s IPO process was investor education, which began in the spring of 2021. Reddit conducted mock earnings calls and over 150 pre‑IPO meetings to educate investors regarding its unique positioning and growth prospects. An investor day in February 2024 allowed over 20 leading investors to meet the management team and learn more about Reddit, helping to establish it as a must-own for public market technology investors.

In conclusion, the Reddit treasury team’s efforts in structuring and managing a Directed Share Programme, facilitating employee selling, and handling RSUs were instrumental in the successful execution of this landmark IPO, which has traded successfully on the NYSE.

Morgan Stanley and Latham and Watkins were partners to Reddit on this IPO.

Best practice and innovation

The treasury team was instrumental in the successful execution of the IPO, overseeing every stage from initial planning to the management of IPO proceeds.

“We completed a one-of-its-kind Directed Share Program that allowed Reddit’s users to participate in its IPO, delivering on one of our key IPO objectives,” explains Sunny Gutta, Director, Treasury.

Innovation was evident in the implementation of the DSP, which reserved up to 8% of the shares for the community and others. This is relatively novel and involved a programme that has only been completed a handful of times in technology IPOs. The IPO also featured a comprehensive plan for managing RSUs, matching the share price used to calculate the tax liability with the IPO price. This approach reduced the overhang associated with future sales of RSUs post-IPO, which could have depressed the share price.

Lastly, including over 1,000 employees as selling shareholders was a complex undertaking, again rarely if ever completed. This required a coordinated team effort across a number of stakeholders. Overall, the Reddit treasury team’s efforts in designing a comprehensive investor education plan, structuring the DSP, facilitating employee selling, and handling RSUs were instrumental in the successful execution of this IPO.

“The Reddit treasury team expertly managed various workstreams during a complex IPO process. Their expertise benefited so many Reddit stakeholders including employees, pre-IPO shareholders, Redditors, and new public market investors. It was a joy to work with them almost daily through this three-year process!” says Rizvan Dhalla, Managing Director, Morgan Stanley Investment Banking Division.

Key benefits

  • Process efficiencies.

  • Return on investment.

  • Risk mitigated.

  • Future-proof solution.

  • Exceptional implementation (budget/time).

This nomination was submitted in our Best Funding Solution category and is justifiably recognised as a Judges’ Choice this year.

Adam Smith Awards sail

The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2025 awards attracted 454 nominations. To find out more please visit treasurytoday.com/adam-smith-awards

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