Reddit has never turned a profit in nearly 20 years, but filed to go public anyway::Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.
Problem is the entire concept of a site like reddit being “for profit” in the first place.
I know we all wax nostalgic about the old non-centralized Internet with its various small websites and forums, but one thing I do genuinely miss from those days was that those places existed because the people running them wanted them to exist. They had ads or took donations to keep the lights on, but no one was looking to get rich. Passion, not profit.
The decentralized internet was run more by people, the centralized internet is run by board rooms.
That’s why I like the idea of the fediverse. That is why this place feels familiar to those early days.
I still remember clicking a bunch of irrelevant ads for knives and other weird shit on a forum I visited regularly because the owner said they get slightly more money when ads get clicked on site.
I’m doing my part!
And in the days before tracking cookies, doing that didn’t ruin all the ads you’ll ever see again
Ads don’t even bother me inherently. It’s part the maximum obnoxiousness of them these days, of course. But most of all, if I do manage to see an ad (like in a mobile app), I get irrationally annoyed at the fact that it is supposed to be tailored to me and yet here I am looking at a 20 second unskippable ad for something I would never in a million years care for.
There was a simple version of reddit that could be profitable without compromising what made it enjoyable for the users, but the suits had to go chasing after a bunch of fads (remember bow they tries to produce a series of video AMAs?).
I have no qualms with a person making a comfortable living off of building a website like Reddit. None at all. I’d rather have someone who’s able to dedicate their full time and even a team to making an experience great for users and making a very healthy living off of it.
But yea, spez is a greedy fuck and the ELT at Reddit are all greedy fucks. Reddit has no business being a publicly traded company.
honestly, it has the word AI somewhere in their last year activities, even if they don’t do it themselves.
Investors are dumb as fuck, they know nothing about anything other than keywords and hype trains, so with the AI keyword they might go crazy on this.
I keep saying it, the stock market is a mistake for humanity, it doesn’t make sense to put a gambling house in the core of the world economy.
The stock market, much like capitalism in general, is useful if regulated properly, but the inherent corrosive nature of human greed on any regulatory system will eventually erode those regulations down and let this shit run rampant. There are genuine benefits to it, but they’re buried beneath the sheer scale of wealth begetting more wealth at the expense of everyone else.
Part of it is that, to spite it being “gambling”, it sure doesn’t feel like there’s a lot of losing going on with the biggest players. They don’t seem to need to be as careful as you or I would need to be. It’d be one thing if it was fair gambling, but it isn’t.
it doesn’t make sense to put a gambling house in the core of the world economy.>
wise words
Every decision made since before the first world war has been a mistake for humanity, from the way we deliver electricity to the way we run the economy to the way we run our education system. Just one big ball of mistakes coming right at ya, all with better alternatives available at the outset, all prejudicially rejected because you can’t make dragon-hoard piles of money those ways.
Pretty soon we’ll all die though, so there’s that.
but they’ve cleaned the site up so much! I mean they got rid of all of us, didn’t they
Perhaps if the ceo wasn’t making like 200m a year, it would show some profits
Not to be that guy, but I think he makes 300k and was given 193m in stock options last year based on some whack evaluation.
Still an utterly insane number, hope they get crushed on the public market
He paid himself 193 mil because he knows its not going to be worth more than 1.93 mil after the IPO.
I’ve spent years watching IPOs, it’s going to get pumped and then dump after a few months. Anyone shorting it after the first couple of weeks is going to lose their ass.
I can’t wait to see how this plays out
Hollywood accounting tactics probably aswell
I think people don’t understand just how good Facebook is at ads. Their relevance engine is unlike anything else. If something 1/3 as effective could be done to Reddit, this place would be making billions.
I’ve run ads on Facebook and I’ve run ads on Reddit. Facebook was like a massage with a happy ending, and Resdit was like being shat on by a vagrant.
There’s absolutely no reason Reddit couldn’t be making tons of money with as much as they know about hobbies and interests in general, and the free traffic they are able to draw to such a mountain of niche content.
I hope not to see Reddit go the way of Facebook. But to say it couldn’t make a profit is not true.
People talk about Reddit and AI in terms of what Reddit will do for those LLMs. But I imagine another part of it has to be what they’ll do for Reddit. Like redditors volunteer sooo much information that it’s really an advertises dream if you can start to thread it together.
Reddit knows who you really are, but facebook knows who you want to look like you are.
I’d think you’re much more likely to click ads based on the latter.
The REAL value of Reddit that tends to get overlooked in these conversations about Reddit’s measurable value in the IPO has nothing to do with its use or its users, but (1) in its ability to influence public opinion and (2) its possession of users and data to sell on, including being a platform for ad delivery to millions of eyes.
Now look at its majority owners: Conde Nast, Tencent (China), and Sam Altman (AI). There are some who believe this is coincidence. But I believe where there is money, there is no such thing as coincidence.
Reddit has already proven that it has never made and will never make a profit in and of itself, yet the cash continues to flow. That’s because Reddit management is structured around churning Reddit’s secondary benefits into wealth for itself, and nothing else.
Look at their actions, both in the short term and in the long term. Regardless of their words, the owners have proven incontrovertibly that neither the users nor even the usability of the site means jack shit to them.
It’s ALL about advertising money, being able to steer public discourse, and scraping data wherever they can find it. That’s the real product.
Thus it’s a pretty certain guarantee, IMO, that anyone who isn’t already on the Reddit board or an owner of Reddit will lose whatever they invest in the IPO, because Reddit is NOT about social media, or providing/creating value for its users. Reddit is solely about scraping the secondary benefits that the users provide and selling them off for the benefit of the few.
Even the selling off of pre-IPO shares – normally reserved for those already involved in the ownership or financing of a company about to go public, because pre-IPO shares can offer massive gains if the IPO is successful – should tell you that they expect RDDT to instantly sink. Why on earth would they give those sweet pre-IPO shares up to the unwashed masses if they thought there was even a remote chance the IPO would at least break even?
This IPO is complete shit, lol. And what’s even funnier is that the C-suite of Reddit is SO used to pulling fast ones over on their users that they aren’t even trying to hide it. I feel sorry for anyone buying these shares, because they are going to tank on day one. There’s literally no value there, other than for the rich boys already skimming it off the top, and this IPO is their final skim.
Why on earth would they give those sweet pre-IPO shares up to the unwashed masses if they thought there was even a remote chance the IPO would at least break even?
I suspect it’s because they’re worried that their users are going to short them and encourage others to do the same, so they’re trying to get them involved and committed. They don’t want WSB causing shit. My guess is that the share prices will do pretty well, at least initially. There are plenty of ignorant investors who want to get in on the next big tech stock. Just a guess though, I don’t know enough about this stuff to invest in stocks myself.
To short a stock is kind of difficult to do on an IPO because you have to borrow a stock to short it, and pre-IPO only the underwriters have that stock, and are not usually lending it out. Naked shorting – where you don’t actually have a stock but you sell it anyway, lol – is illegal. I know there are a lot of folks talking about shorting RDDT here but you have to actually borrow a stock to short it.
More likely is that Reddit’s trying to get people to buy at a fixed price before it tanks, because any shares purchased pre-IPO are guaranteed cash at a set rate for them, not subject to the trading volatility that will come with the IPO. I think that’s why WSJ is calling Reddit’s strategy an “unusual IPO wager.”
So far this year it’s been a rocky start for IPOs anyway, many are trading below IPO value, even companies that have more in the way of tangible assets than Reddit. But the clock is against them, the Reddit board pretty much has to do it as soon as possible or fight the added market volatility that comes with an election year, among other reasons.
I’ve linked a couple of articles; the second one especially is very helpful. It talks about a similar situation, a healthcare company called BrightSpring with a heavy debt load looking for capitalization that went for an IPO in January 2024, and how they spent their pre-IPO time trying to talk investors into buying at a set price beforehand because that’s how they could still get some cash out of an otherwise shitty IPO showing. Personally, I think this is exactly what Reddit is trying to do, and what this car-dealership style hawking of pre-IPO shares via email is trying to accomplish for the Reddit board.
Archive links:
WSJ: Reddit Plans to Sell Stock to Loyal Users in Unusual IPO Wager
WSJ: Will the IPO Market Spring Back in 2024? The First Big Debut Offers Clues
I smell a short position in my future after that IPO…
Imagine the absolute conflict of interest that is r/WSB
Who else is going to short?
Ahh…Tech industry, never change
Hoe does this work. If a company has not made a profit in 20 years. How is it not bankrupt?
You keep telling the next investor it’ll be profitable soon. I believe the guy that came up with this scheme first went to prison or something, but afterwards we all collectively decided we were cool with it.
That’s why they need to go public in the first place. Investors are like it’s right now or you’re shutting down, no more free money for you.
They’ve had investors who were willing to pay into a loss-making company. Could be that they sold investors on the idea that it will be profitable at some point in the future but it needs to be funded while it grows. Could also be that the value they see in it is not just financial - the ability to influence opinion, harvest data, stuff like that.
Profit
Does it have shell companies that Reddit offloads its profit to…
Might be similar to twitter or news media, influence is worth more to its owners?
Data is valuable as well…
Top 10% own stock, so that can also be part of the stock games…
Reddit has been a private company for its entire existence. There really isn’t a point in it making a profit, as long as the people running it are paying themselves.
Unlikely. It’s in all likelihood just a bad business, like so many other VC-subsidised businesses that have come before them. Case in point: Uber, Airbnb, WeWork.
The whole game is to offer services at a loss for enough time to lock in customers, then raise the prices in the future.
known for its chronically online userbase
… they wrote in their online publication nobody not online could read.
How are you parsing that quote? What do you think it means?
