By Olivia Robertson
Wall Street news has been booming with Reddit, a social media platform and online community where users can submit, comment on, and vote on content in various topic-based forums called subreddits, as a focal point. The social media platform recently announced the launch of the Reddit IPO process, offering shares to the public for the first time, an announcement that has become one of the most highly anticipated Wall Street tech debuts of recent months. Reddit reserved 8% of its public shares for its users, moderators, and employees. This method is not uncommon but is often seen as non-traditional and has been met with reluctance as many of those who fall within this group who are eligible to purchase reserved stocks cite strained relations with Reddit’s management and concerns over the company’s financial health, which includes a cumulative loss of $716.6 million. What can we expect from Reddit going public, and what can we predict will be the outcome of this reluctance of eligible purchasers to invest in the social media company?
Reddit IPO Case: Professor Josh White Shares Expertise
CNBC, in the article Reddit power users balk at chance to participate in IPO as Wall Street debut nears, asks the same question, calling on Joshua T. White, Assistant Professor of Finance and Brownlee O. Currey Jr. Dean’s Faculty Fellow at Vanderbilt Business and Former SEC Economist, to provide expert commentary on Reddit’s IPO. In doing so, he noted that Reddit’s directed share program (DSP), which reserves shares for high-reputation users and moderators, could be “nice stocking stuff,” referencing how similar programs have rewarded early participants in past IPOs. However, White cautioned that Reddit’s IPO is likely riskier compared to the tech IPOs of 2020 and 2021 due to the current market conditions and the general downturn in tech stock performance since early 2022.
Teaching Finance: Learning from the Reddit IPO Case
For many students, being in the classroom with Professor Josh White is a deeply immersive experience. He enriches the learning environment by incorporating real-life scenarios, providing finance students with practical insights into situations they may encounter in their careers, such as the Reddit IPO case. In a recent discussion, Professor White elaborated on the advantages of integrating real-world examples into academic settings, his extensive experience in the finance sector at the U.S. Securities and Exchange Commission (SEC), and how he combines the 2 to make for an educational experience that shows the clear connections between what his students are learning and what is happening in reality.
“I’ve found that one of the most effective methods to bridge the gap between the classroom and reality is to present public cases that I’ve been involved with or spoken with the media about to my students and allow them to work through the pros and cons and come to a solution on their own,” says White.
His guidance, being involved in the cases from an expert perspective allows him to moderate these classroom discussions while also allowing students to holistically explore solutions themselves.
“Professor White’s approach to letting student discussions guide the lecture has greatly enhanced my learning experience,” says Jocelyn Riopel (MSF’24). “His method encourages us to think critically and engage deeply with complex finance topics, making the classroom a dynamic and enriching environment. His use of real-life references and stories brought typically dry finance concepts to life, making them easier to understand and connect with.”
From Congress to the Classroom
White testified before the United States Congress on reforming the proxy process to safeguard investor interests in July 2023 and on the SEC’s climate disclosure rule in April 2024. Like with the Reddit IPO case, he was able to bring his real-world experiences to his students. White brought his congressional testimonies to his class, allowing the students to ask questions before and after to understand the key issues and, from there, analyze the situation at hand to better comprehend how what they are learning is reflected in reality.
White provided a photo from his perspective at the hearing on reforming the proxy process to safeguard investor interests in July 2023.
“We spent an entire class talking about why the SEC creates rules for disclosure. What are the costs? What are the benefits? And what the current issues are,” says White. You can take a finance class, and you can learn it from lots of people. I think what the students like about this approach is that they not only learn finance, but they see how we arrived at these rules and regulations.”
White recognizes that in the classroom, students can be taught that a financial process, such as helping a company go public as an investment banker, is the way it is because that is what has been determined by lawmakers or regulators to help companies and protect investors. However, White wants his students to be able to dig deeper and understand why these processes and rules exist and where they came from.
“I can tell the students these processes are what investment bankers and managers must do at the IPO because the SEC rules require it,” says White. “Or, you can teach them that this is the way it used to be done because of prior SEC rules and these are the technology changes that allow it to be done this way now. I think that adds some credibility to the instructor to convey why rules and regulations exist and why they have changed over time. It also gives students insight into how the world works now and how it might work in the future as technologies and regulations evolve.”
Encouraging Student Curiosity
White allows the students’ discussion to lead lectures, often allowing them to organically start the conversation surrounding teachable topics via their genuine curiosity.
“I try to take a very balanced approach to classroom discussion,” says White. “There’s usually no one right answer to a problem or an issue. If there were, it wouldn’t be controversial. I try to set up the discussion so that the students can identify the issues themselves—I don’t feed it to them. The ones that do a nice job of that, I say, ‘That’s great, that’s actually a key issue that was brought up in this Congressional hearing or in this comment letter to the SEC.’” says White.
“As a student from a non-finance background, Professor White’s classes have been a fascinating and enriching experience,” says Vincent Alemede (MBA’25). “His ability to make complex financial concepts comprehensible and engaging has truly sparked my interest and eagerness to learn more.”
Scholarly Research Inspired by Student Engagement
When asked about the benefit of implementing real-life experiences in the classroom, White focused heavily on student involvement in new areas of research.
“Typically, academic research is very specialized because we need to create new knowledge around a narrow topic that hasn’t been explored,” says White. “Students often want to hear about a professor’s research, no matter how narrow or tangential the topic is. However, that is not the case in my class because it is closely aligned with my research program. I enjoy that because it allows me to both incorporate my studies in the course material and to generate new research ideas based on our classroom discussion. I get feedback from the students and they get it from me, so we learn from each other’s experiences.”
White mentions that students have impacted his research, stating, “I’ve had students bring up questions as we talked about contemporaneous finance issues that resulted in starting new research projects, which eventually led to publications based on those conversation. So I think the students value this two way exchange of information—I certainly value it.”
When speaking to White, it is clear the value that his experience brings to the classroom, when combined with his students’ curiosity, is limitless and advantageous for his research and his students alike.
“When your research and work experience directly relate to what you’re teaching, it just creates a richer learning environment, such that everyone benefits. I benefit, the student benefits,” says White. “And, ultimately, the companies that they go to work for benefit as they get an employee who possesses knowledge and real-world insights that most graduates wouldn’t have into how the SEC works, what issues are important now, and, what issues will be significant down the road.”
White’s method of connecting classroom learning with real-world applications, like the Reddit IPO case, is clearly centered on the students, giving them a sense of fulfillment and leaving them with pertinent questions for future sessions. This approach ensures that both White and his students are well-prepared with practical knowledge they can use in their finance careers. His aim is to encourage students to think innovatively and to challenge conventional wisdom, fostering a mindset that’s not confined by traditional methods. By facilitating discussions grounded in real-life scenarios, White achieves this goal effectively.