I can sort of understand the mentality, but right now Reddit looks like a terrible IPO prospect. It isn't profitable, it's poorly managed, lacks transparency, depends on volunteers to function on a daily basis, and when they make a move to make themselves profitable their user base rebels in a fairly public and humiliating way.
All of this in the post-Fed rate hike world where money isn't free. Besides I feel it's important to remember that Reddit has been talking about an IPO for many years, and I doubt it's going to happen now.
Reddit shouldn't even try to go IPO. It's basically a collection of forums. They should be a private company that makes a small profit hosting the forums instead of trying to be like Facebook
I don't think Reddit is profitable? I can't find any sources indicating it is and several indicating it is not. That isn't to say they can't squeeze a profit out once they IPO, but it's been fairly altruistic up to this point.
There’s plenty of reasons that Reddit would be a terrible public company and self-promotion rules are pretty low on the list.
Much bigger problems are the inherent anti-ad ethos of its users due to being more tech savvy than the average internet user (and by that I mean savvy enough to install an ad blocker), the massive bot problem, active user angst for any site changes regardless of revenue or interaction impact, all of which generalize to, “we’ve been around for nearly 15 years but have never managed to be cash flow positive”.
I think they really missed the boat for an IPO(and subsequently dumping the shares on retail chumps). The tanking equities market, rising rates, and recession fears mean there’s little to no chance of it happening any time soon.
I never did understand how Reddit could realistically remain the site it was after IPO. All the 18+ subs would have certainly vanished, and the fact they are now quarantining is the first step in the process. They've also tried to start paying moderators by making them curators, and that fell apart due to controversy. Is Reddit competently managed enough to merit an IPO?
I wonder how can you even think about doing an IPO after trying so hard to destroy your user base. Reddit has never been perfect, but why corrupting its core values of usability and simplicity?
You’re ending up with a product that the board likes and users don’t.
I'm convinced Reddit will never IPO because it will have to open its books, and that a large chunk of their revenue comes from direct payments for astroturfing. It must be at least tempting for them - and it's not like anyone would notice on r/politics or any of the other big subs.
The only problem I have with Reddit from a valuation perspective is that it doesn't really offer much 'secret sauce.' The tech itself is not great, and I don't really know of anyone who likes the redesign. Point being, the value is all in the users and content. Users are fickle, and as we saw from Digg (and lesser extent, StumbleUpon), can flee en masse at any moment. That's a tough pill for me to swallow as a potential investor.
That is obvious, isn't it? Reddit is a bad investment (based on their execution) and if the IPO original price was not well estimated it has a pump and dump effect [1]. A similar pattern is repeated with a successful stocks like FB/META [2] but if I remember well it was discussed at that time that the IPO price was wrong, they have excellent network effects and they have a lot of room to innovate (e.g. ads) while Reddit has tried already the "innovations" but they don't are well implemented (e.g. also ads).
It feels like the more a company tries to pump value for shareholders, the less value is left over for users. Reddit has been very obviously working towards an IPO for some time and you can see it in the worsening user experience and onerous (prudish) moderation policies pandering to advertisers.
Shareholders are parasites on a company as their interests are one dimensional in favor of themselves. Gotta get that big IPO payout though.
Careful, Reddit is rumored to IPO later this year so they've been turning the enshittification screws. Expect to see less and less legitimate opinions, more and more corporate manipulation and ads, and likely a lot of LLM-generated astroturfing as the profit engine dials up to 11.
When you can find older stuff or well-reasoned opinions on Reddit, it's a goldmine. But sadly that doesn't justify the pricing Reddit's owners surely want to see in the IPO so it'll likely get crowded out by short-term profitable long-term garbage priorities.
Except most of Reddit’s most valuable users (the ones who spend time and contribute) don’t use any of that because the experience is terrible. Pretty much everyone uses the old.reddit.com that doesn’t really need product development and performs way better than the new site. All of their innovation and product dev is going into the new site, where few people see it.
I look at reddit and see a company that has built a product that it’s users like, but they can’t monetize that product. Everything they try the users either revolt over or ignore completely, and the politics of running the site are becoming untenable.
I wouldn’t touch this IPO with a mile long stick. There is no upside at any valuation that would be worth an IPO.
I think in general there is a lot of anger or frustration around the fact that Reddit's primary trove of value is content that has been created, posted, and moderated for free by their community. Despite this, Reddit trends more and more user hostile every year, with rules, redesigns, and other limitations that often come across as attempting to punish or hinder the very group that is the core of their value. While I doubt the majority of the user base takes issue with Reddit wanting to be profitable, the potential IPO is coming across very much as a rug pull of sorts to those users.
I personally wouldn't invest in Reddit, those with a memory longer than a few weeks will note that they go from one self-induced crisis to the next.
Their upper management is directionless and the result of battlefield promotions and they've demonstrated time and time again that they have no vision for the service.
Reddit exists in the same way that digg and slashdot before it has: it's the incumbent, the default choice. It could lose it all in a year and no one would be surprised - because it's happened multiple times already and the userbase is already highly cynical.
That wasn't helped by making the site unusable on mobile; a change made to entice (read: force) users to the more lucrative app. However this merely led people to alternatives such as Apollo, which remove the ads, the reddit value-generating nonsense and introduces useful features such as the ability to download video content. Perhaps counter-intuitively these kinds of apps are likely to keep users on reddit. However with an IPO I would not be surprised to see Reddit pull 'an Instagram' and invest efforts in preventing 3rd party apps from functioning correctly.
All of this in the post-Fed rate hike world where money isn't free. Besides I feel it's important to remember that Reddit has been talking about an IPO for many years, and I doubt it's going to happen now.
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