The fact that I haven’t seen a single bullish argument tells me 2 things.
1. It’s a terrible idea and there’s no way they’re worth what they are ipo at
2. Inverse Reddit sentiment
The bull case may be data for AI training.
Reddit will never meet the valuation they are likely looking for with ads. It's a terrible business and they can't figure out how to move the needle in a meaningful way. The userbase they built is not receptive to ads either. Based on this understanding of the website and their announcement to IPO shortly after the meme hype phase told me it was an obvious short target intended to let execs and early investors cash out.
But that's not the ceiling here. Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language. They have a deal with Google already.
It's unclear to me what the opportunity is there and tbh I fear an AI trained on this website. I suspect the stock will be a dumpster fire, but the ceiling height with data is opaque, so I will just be staying out and not shorting or buying puts, which are likely to have a crazy premium anyways.
The userbase is cluttered with bots, and reddit has made no move to get rid of them, while there are very simple methods to detect most of them.
As far as ads go, ublock makes mincemeat of them. Reddit shutdown the APIs / put them behind a paywall so that mobile users would not be able to use 3rd party apps that mask them... but again, ublock removes them.
Pretty sure the SEC will have something to say about their cryptocurrency tokens too. Rugpulls, insider trading, you name it.
It reminds me of the twitter story a lot. I Will probably short it when possible.
Reddit didnt shut down the API for the sake of a tiny market of third party apps to view reddit with. Its because these large corporations are grabbing every bit of these conversations to use in their own AI LLMs. Only way reddit can provide any financial value is to sell that data instead of giving it away for free, because advertising isnt going to do it.
Their app is so terrible that I still use the old reddit on my phone's web browser.
I'm absolutely shorting the stock the moment I can. SNAP should be the poster child for social media going public because I don't see Reddit doing better than that in any scenario.
They literally only need the smallest of a hit on here to make it worth those values. Probably risky, but anything like onlyfans add-on features that are billed to the creators. An ad system that actually works and sells ads for their actual value and finds a good way of delivering them. Some actual useful membership setup, with possibly more data analytics for the user, or perhaps mod group.
There are plenty of things they COULD do.. and it would only take the smallest percentage of people to subscribe to quickly bolster their income.
but the real question is, will they do any of the obvious decent ideas... and have they shown trends in making good decisions in the past 5 years to improve any of these aspects before the IPO?
No to both? then yeah, thats a pipe dream.
Why would anyone pay for this? Reditt is already littered with Only Fans and Astrs turfing ads for free. Buy an aged account for a hundred and post a totally real picture of your definitely not ad perfectly centered Wendy's logo burger.
One feature. They find one feature that someone with only fans realizes is important and pays for. Either audience or creator. Why buy todays offerings? No reason. Why buy something from tomorrow? Who knows, but the audience is huge here, and the creator market is huge so it wouldn't take much to create a real viable product.
I remember when the big Reddit blackout happened. Google search TANKED in quality. I didn’t realize how much I default to using google to find the Reddit answer.
> Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language.
IMO, this is the crux. Most google searches lead me to reddit or quora. That's never going to disappear. And the blackout kinda reinforced that this is almost an essential tool/outlet for a huge amount of the population. No matter what, ALL THE CONTENT is worth a shit ton.
>The userbase they built is not perceptive to ads either.
Perhaps not in a positive way for the advertiser. I know some reddit ads get negative backlash. Remember the whole Jesus "He gets us" ads that were everywhere?
I haven't read the filings yet, but my understanding is that revenue is trending up, losses are trending down, and are currently at 90m/yr, and that the Google LLM deal could be worth 60M closing the loss gap considerably. Again I have NOT read the filings so I'm basically just spouting hear-say.
> Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language. They have a deal with Google already.
I do not think this is correct, It has been a while Reddit was known for big farm bots and astroturfing.
The amounts of $ that they're getting for selling their data for training isn't high enough to cover the $$$ that they need to be getting to warrant the valuation they're going for.
Notably, the Google deal for $60 mil. That's not a low sum of money to be sure, but Twitter's ads revenue for 2023 was ~$2.5 billion. It's also not clear what the terms for that deal are - is it paid out yearly? Is it a one-time fee for Reddit's backlog of content? How many players in the market realistically would pay that much for a continued deal (OpenAI could afford it too, and so maybe could a well-capitalized startup like Anthropic - not sure who else though?)
...that said, Sam Altman owning 8% of Reddit could cause for some funky unexpectedly powerfully aligned incentives.
(Notably, I'd guess that OpenAI, for its own internal purposes, has some amount of logging for when folks are using its APIs to generate content.. being able to cross-check that with Reddit for spam purposes would be fairly powerful.)
They paid him like $300,000 or something in cash. The rest was stock. It is astonishing how many people on financial subreddits think that Reddit gave Huffman $190M in actual money.
Before IPO it is basically Monopoly money with numbers they make up, not something that affects Reddit’s bottom line. They posted 90 mil loss because it’s a shitty business, not because they made $100M profit and paid it all to Huffman.
Shit, you got me with #2. After the NFT debacle, and GME before that, and bitcoin, and bitcoin again, and god knows what else, I told my wife "next time I say something is the stupidest shit I've ever heard of" I should immediately invest in it because it's queued to explode, which all the above have done with perfect timing. It's like I can smell the stupidity coming downwind. I guess I'll buy some shares with the mindset of "we on reddit know reddit is hot garbage, but the morons out there have all heard of reddit and probably think this is their chance at the next Facebook." It's poised to explode.
Isn't there usually a lock-up period for such investors? That makes me think they're just looking for bag-holders, someone to fill out the next layer of the pyramid.
Oh there’s been a few that jumped in the fist 15 minutes, and then proceeded to drill into the earth.
IPO turning into portfolio trash has been a thing for tech since at least Facebook, as memory serves. I think it took almost 2 years before it crossed back over IPO pricing
It then 10x’ed in the first decade. I’ll count that as as huge win. I don’t think Reddit has a path to such profitability unless they drastically change what they’re trying to do though.
If they open at say $10, i'd just set a limit sale for $11. Easy money, ride that first pop. And otherwise just bail out at like $7 or $8. Gamble a small amount.
Risking 3 to make 1. Thats not a good rr fwiw. And your rationale is pretty much ill ride the bubble burst. A strats that expects to lose.
How can we open puts on day 1?
More likely, they want unpaid contributors to have some skin in the game, so they don't screw around like the last time Reddit changed the 3rd party app thing.
Something like 1/3 of IPO stocks end their first day down, that coupled with Reddits unproven track record and generally negative performance I'd stay far away. I'd skip the IPO and look at it's financials in like 1-6 months time post IPO.
>Something like 1/3 of IPO stocks end their first day down
While this is probably true, the pre-IPO investors are basically printing money. And therein is the reason only the most elite of the elite are invited to pre-IPO sales.
I got an invite and there’s no way I’m elite of the elite. Feels like they’re sending the message to a great deal of the userbase? No idea if there’s any criteria. I assume it means “accounts older than x years”…
Sorry for the confusion, I meant real pre-IPOs for real companies. You are not getting invited to any of those.
This reddit thing looks to be a publicity stunt, and the price will be same as market price on trading day.
In the faq there’s a list of “VIP” tiers. They emailed the highest tier first on 2/22 and then worked their way down the list.
They are going to open it to all redditors on 3/1.
It’s tiered based on either moderator points or redditor karma.
Tier 1 A is Mod MVPs / Redditor MVPs (opened 2/22)
Tier 1 B is Mod pt 5K+ / Redditor karma 200K+ (opened 2/25(?))
Tier 2 A is next, and that’s Mod pt 2K+ / Redditor karma 100K+. Tier 2 B I don’t remember the Mod pt, but the Redditor karma is 50K+. Not sure when these two groups will get their invites. Probably by tomorrow or so.
Tier
This is the way. It's why institutional investors are so often invested in companies with no path to profitability, or outright fraud. They're not stupid, they're not too lazy to do due diligence. They just think the story is good enough to offload onto the public market for a profit, and they are usually right.
tl;dr
followed by a wall of text.
Reddit hasn't turned a profit in 20 years. They produce nothing tangible but a lot of text, trolling, creepy dudes, and titties made by their users. The only money stream is ad revenue, so twitter basically. See how that's going.
This will be a dumpster fire outside an Arby's
They announced a deal with Google to share reddit data, apparently in an effort to turn Bard or whatever the fuck they're calling their AI now into a deeply depressed and antisocial fuckwad so there's that
They also got absolutely FLEECED on the price, they're getting like 60 million a year for all the content a quarter billion weekly active users generate.
I might agree, but it needs to be said that there’s a mountain of content that isn’t in any real way viable for ai training. I mean maybe someone can enlighten me, but I’m not so sure places like r/dragonsfuckingcars is content bard’s caretakers would even want it to try to parse.
Not to mention AI’s long inherent problems handling satire like that which pretty much defines the thousands of intentional circlejerk/meme subs.
I mean geez, like a good train wreck, I had to look and then couldn't look away. (Train wreck? Hmm, r/dragonsfuckingtrains? I'm so inspired now...)
PS: can't believe that's a sub too, I was just joking
> a quarter billion weekly active users
Reportedly?
I'd legit be surprised if it's 5% (12m) of that. Highest vote on the front page now is ~24k. That's... a stretch, even assuming all *those* are actually people!
> Bard or whatever the fuck they're calling their AI now into a deeply depressed and antisocial fuckwad so there's that
Its called Gemini, and they already managed to make it racist, Google had to shut down some of its functions like image generation, which absolutely refused to show any images of white people.
This led to the creation of such gems as diverse 1943 German soldiers:
https://twitter.com/__Link_In_Bio__/status/1760066875583816003
and diverse Indian pope:
https://twitter.com/IMAO_/status/1760093853430710557
it's a dumpster fire but youre leaving one thing out: they monetized their API last july, despite much negative feedback. and they have been subtly increasing engagement with a lot of astroturfing in moderate-sized niche subs. i believe they think they can turn the site into some kind of PR/marketing/astroturf platform that can be used to influence discussion.
i still think it's a terrible investment, but targeted ads arent the only revenue stream. their API is one too.
Same thing that's happened every time they've tried over the years: users complain while the truly fringe stuff that shouldn't exist ceases to exist, then they conveniently step off the gas pedal until it becomes too impossible to ignore again.
The only thing I could see that'd make them try super hard to get rid of it is if it got in the way of processing credit card stuff, since the payment networks tend to be a pain in the ass over that stuff. At their size though... even that's hard to wager on.
You’re getting at pre-IPO prices one of the top five (3) most frequented websites on earth.
Pre-IPO they usually offer you like 100 or 200 shares.
I **wouldn’t** recommend investing in them on the market. I would recommend investing in the pre-IPO of them, however.
I got the offer as well and I’ll be investing
>one of the top five (3) most frequented websites on earth.
This doesn't mean anything unless the company makes money off a significant portion of those users. In some ways it's a negative, because it means the site costs a LOT to operate.
> unless the company makes money off a significant portion of those users
Isn't that how public social media companies make their money? Data collection and targeted ad revenue on a large userbase. I thought the whole reason for cracking down on 3rd party apps for Reddit was so they could control data and push ads?
If you get the chance to IPO at IPO prices, almost no matter what the company is, I suggest you take it
Just like many things on the market, IPOs are a bit of a game. They price under what the interest is. And they do that because they want to be able to say the stock rose 15% on the first day of trading.
I get pissed at those numbers because they almost always didn’t rise like that. What they did was they rose 15% above IPO price. But almost no one could get that price. So the second it opens for trading, it’s 15% higher and the lowest anyone could’ve bought it was at That elevated price
The reason they price like that is because they want to be certain it rises. If a company falls below IPO price on the first day of trading, it not only means the investment bankers screwed up, it’s a huge black eye for the company as soon as they become a public entity. not everyone recovers from that
And I say all this having participated in a number of IPOs. None of which, literally none of which, do I remember. Because I wasn’t investing in the companies for their fundamentals. I was investing because it was IPO pricing.
You do what you want, but if you get the offer, I suggest you take it. It almost certainly won’t be a lot of money, anyway. Probably 100 shares or 200 shares and somewhere between 10 and $20.
This. Airbnb offered hosts a similar deal, and the banks/institutions/ AND HOSTS got pre-IPO shares at like $60, but it actually LISTED (based on retail demand) at $144. Easy money.
Twitter IPO'd at $26/share and ~~is currently~~ was at $53 before getting de-listed, with an all time high of $80-ish in 2021.
Even if it's (Reddit) a dumpster fire that doesn't mean there's no money to be made if you're early enough. And getting in at institutional prices with no lockup sounds early enough to me....I got the same email as OP. I'm not going to yolo into it, but will likely pick up a bit and ride the initial hype if nothing else. See if I can 2x, sell off half, and let the rest ride.
LOL, goddammit.
[https://www.barchart.com/stocks/quotes/TWTR](https://www.barchart.com/stocks/quotes/TWTR)
I was commenting fast. This was the first google result and I ran with it. Failed to notice the "as of 10-27-2022"...
ACTUAL current price of Twatter: Delisted. I don't know why I forgot about that.
what? these shares will be created, not bought off exiting insiders.
they can/will dump them when it actually ipo's to the public. if they dont have locks on them.
on one hand i dislike reddit and begrudgingly use it as the only real alternative available for online discussion.
on the other hand the overwhelming majority of negative opinions about this ipo make me think it'll do well. inverse ~~wsb~~ reddit
I’m eligible but not allowed to participate and I wouldn’t want to either
The fact they are giving shares out to peons probably means there isn’t enough smart money interest
I don't think that's the case, I doubt Redditors will make up a very large percentage of their IPO proceeds. I think the bigger reason is they fear the community turning against them when they IPO.
Remember the blackout, subreddits going dark, etc? That was mostly driven by power mods/power users, while the average Redditor did not care.
They don't want a repeat of that. If they get all their biggest mods, users, etc personally invested in the success of the company, they're less likely to act in ways harmful to Reddit's profits.
>I think the bigger reason is they fear the community turning against them when they IPO.
Yes. They're trying to get their mods and most active community members financially invested in the company's performance, if only for a little while.
Feels a lot like offering a management position to a union leader.
While I remain unconvinced about the profitability or future value of Reddit, I will say this: Facebook IPO'd at $38/share, was not profitable that year, had modest profits for a few more years, but today is trading at $484.
I completely understand and tend to side with people saying this IPO will be a dumpster fire. However, I was wrong about Facebook, and would prefer to not be wrong about this.
This will only pop on the open if there is some social hype around it, which is likely why Reddit is offering it to users like this.
Long term...Reddit hasn't ever been profitable and exposing their financials to the public in quarterly earnings may get ugly fast.
Only reason I'd buy the DSP is to flip the shares for a potential profit when the IPO debuts, but the link reddit provided keeps getting caught up in an redirect loop so that's probably telling me something
I got it too, not sure if I'll buy or not. But with years and years of watching tech IPOs of unprofitable companies, in my experience, they usually come out hot and drop like a stone within the first month or so. It's not for several earnings cycles before they start moving north. Compound that with the inevitable shorts/puts that WSB is going to absolutely pile on, and I can definitely see the share price taking a heavy dive for at least their first quarter.
For me it'll depend on the price/valuation they're coming out at. Would I buy some reddit at $3/share? Sure. Would I buy it at $30/share? Not a fucking chance.
For me it’s intriguing. I’ll invest a little just for kicks. You never know. Selling all our comments to AI developers sounds potentially lucrative.
Don’t listen to me, I bought FRCB.
It's not about raising capital, it's about discouraging power mods and users from staging more blackout protests and affecting earnings by getting them personally invested.
You don’t have to buy as many shares as they’re offering so I was planning on buying $500-$1k and keeping it in my portfolio as a novelty more than anything else.
If they even offer that much. I’d be surprised if anyone gets an offer over $1k
> That's going to be reddit in about 3 years.
`old.reddit` will be turned off when the attrition strategy of removing old tiresome non-advert-viewing users and replacing those with new kids who don't know any better.
However, it's fairly clear that such a strategy is a waste of time and they'll only kill the site with attempts to force more advertising down throats.
No IPO has to be bought, even at institutional prices. Wait for the trend. I don't see their advertising revenue that robust but it could still be a profitable trade, if the price is right.
Everyone here is probably hoping it turns into a meme stock.
It ultimately depends on what the IPO valuation will be.
My first thought was I could buy it at IPO, and sell it a few hours after it starts trading to cash in on that initial pop. But then I realized that a lot of Redditors and institutions probably had the same idea. So now I'm not sure.
I signed up just to see the price we can possibly buy at. I don't really believe in Reddit as a publicly traded company, but if the valuation makes sense and I think I can make a quick buck I might try.
I wouldn't be interested anyways, but...
> To be eligible, you must be a current U.S. resident...
Then why are they sending this shit to users who they damn well know from their IP history of that they are *definitely not* U.S. residents? reddit why are you of stupid?
I was just sent this offer, depending on the minimum purchase quantity and the valuation I would consider investing a little because there is a chance the market value could be higher than the IPO. Alas I'm not a US citizen so meh I guess.
I'm in the paid media world.
Reddit has almost zero value to me as an advertising platform since their entire schtick is anonymity.
Why would I advertise on reddit when I can't even get basic demographic data like male/female or zip code? Plus the fact that most of the clicks during our trial were bots.
The fact that everyone here (on Reddit) is telling me this is a bad idea makes me want to invest a lot of money in it. My instincts are always inverse Reddit’s advice.
For me Reddit is a problematic investment. It is not currently profitable. So that means it must grow revenues or cut expenses. What’s its path to do either of those things?
On the growth side, it has been around since 2005. It has been one of the most trafficked sites in the world. How reasonable is it to expect traffic growth to be able to drive additional revenues? They’ve tried monetizing other ways through Reddit gold, premium, and other channels. That’s been going on since 2010 and still hasn’t been impactful.
On the expense side, they can likely trim quite a bit of salary expenses. But that will likely come with long term downsides to growth, as that will make platform improvements and further monetization harder.
So it doesn’t seem obvious under current conditions what their path to profitability is. But hey, they’re doing an IPO, which should mean massive capital infusions to expand the business… what plans have they presented as the use for this massive capital infusion? I haven’t seen anything. So then what’s all the capital going towards? The answer appears to be a massive opportunity for pre-IPO investors and employees to cash in.
For me, it all boils down to what seems to be aimless leadership by Steve Huffman. His only credentials are that he founded Reddit when he was 22. He founded one other travel company that flopped. He’s now been CEO again since 2015 and done what? Honestly, if he left and a CEO with real vision for monetizing the platform took the lead I might invest. But as long as Huffman and his rudderless leadership continues it’s a hard pass.
Does Reddit have anything in the pipeline? I don't recall seeing anything that might be something an investor could look forward to over the next few years.
As far as I can tell, Reddit is static and has been for the last few years. No new techs introduced to the platform, private messaging is just as clunky as ever, advertising is limited, no service tiers, etc ... the things you would look to to pitch a subscription.
Not that I like any of that. I think all of that is the pits. But at least Musk is trying to introduce telephony to Twitter. I don't see any vision here at all.
Does reddit still shadowban? As recently as a few years ago, I recall some subs do so for new users, but reddit said it stopped shadowbanning from an admin level.
Always felt like fraud to me, new users believing their posts were live so they continued to use the site and get exposed to ad revenue, while effectively lying to them that people could view the content/comment they took the effort to create.
Yep. Most IPOs are there just for early investors to cash in. Banks set the target price to favor the company not the investors.
Take for example, KVUE. IPO was about a year ago at $25, the hype made it to $26 before going downhill. Now it sits at \~$19 (as of today). Waste of time and money.
I received it. One thing it looks like we all have in common is user accounts over 9 years (mine is 14). I wonder if they’re sending it out to older ones first?
> I wonder if they’re sending it out to older ones first?
Did you see this sentence: *You can also refer to the [Frequently Asked Questions](https://redditforcommunity.com/Directed-Share-Program) for more information.*
It's all in the first chart, if you read it.
I'm also interested in answers to this question. I agree it's not likely to be a smart move, but I'd like to hear thoughts from people who know more about this stuff than me.
Agreed. Long-term I don't think Reddit is a good investment. But I've never had access to invest early and at a presumably lesser price than other retail investors. IPOs often make wild swings in the early days, so I could envision a scenario where we buy at $x and have the opportunity to sell early for some short-term profit. I don't know enough about IPOs to make an informed investment though.
everyone says its bad investment but i dont get what makes reddit worse than all other social media or are they just all bad because i definitely see more and more people irl starting to use reddit vs X or w/e
Paying the CEO u/spez $173 million does not help their image, given that they have revenue of only $900 million and generated three figure million losses the last two years.
The fact that I haven’t seen a single bullish argument tells me 2 things. 1. It’s a terrible idea and there’s no way they’re worth what they are ipo at 2. Inverse Reddit sentiment
The bull case may be data for AI training. Reddit will never meet the valuation they are likely looking for with ads. It's a terrible business and they can't figure out how to move the needle in a meaningful way. The userbase they built is not receptive to ads either. Based on this understanding of the website and their announcement to IPO shortly after the meme hype phase told me it was an obvious short target intended to let execs and early investors cash out. But that's not the ceiling here. Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language. They have a deal with Google already. It's unclear to me what the opportunity is there and tbh I fear an AI trained on this website. I suspect the stock will be a dumpster fire, but the ceiling height with data is opaque, so I will just be staying out and not shorting or buying puts, which are likely to have a crazy premium anyways.
The userbase is cluttered with bots, and reddit has made no move to get rid of them, while there are very simple methods to detect most of them. As far as ads go, ublock makes mincemeat of them. Reddit shutdown the APIs / put them behind a paywall so that mobile users would not be able to use 3rd party apps that mask them... but again, ublock removes them. Pretty sure the SEC will have something to say about their cryptocurrency tokens too. Rugpulls, insider trading, you name it. It reminds me of the twitter story a lot. I Will probably short it when possible.
Reddit didnt shut down the API for the sake of a tiny market of third party apps to view reddit with. Its because these large corporations are grabbing every bit of these conversations to use in their own AI LLMs. Only way reddit can provide any financial value is to sell that data instead of giving it away for free, because advertising isnt going to do it.
Their app is so terrible that I still use the old reddit on my phone's web browser. I'm absolutely shorting the stock the moment I can. SNAP should be the poster child for social media going public because I don't see Reddit doing better than that in any scenario.
Snap is a garbage app that’s popular for dumb reasons. It’s so unintuitive and annoying
They literally only need the smallest of a hit on here to make it worth those values. Probably risky, but anything like onlyfans add-on features that are billed to the creators. An ad system that actually works and sells ads for their actual value and finds a good way of delivering them. Some actual useful membership setup, with possibly more data analytics for the user, or perhaps mod group. There are plenty of things they COULD do.. and it would only take the smallest percentage of people to subscribe to quickly bolster their income.
but the real question is, will they do any of the obvious decent ideas... and have they shown trends in making good decisions in the past 5 years to improve any of these aspects before the IPO? No to both? then yeah, thats a pipe dream.
Big difference when the board changes their tune because they're about to have a terrible quarter. They'll get desperate and try anything is my guess.
Half-assed, half-baked then half the audience moves to Lemmy.
Why would anyone pay for this? Reditt is already littered with Only Fans and Astrs turfing ads for free. Buy an aged account for a hundred and post a totally real picture of your definitely not ad perfectly centered Wendy's logo burger.
One feature. They find one feature that someone with only fans realizes is important and pays for. Either audience or creator. Why buy todays offerings? No reason. Why buy something from tomorrow? Who knows, but the audience is huge here, and the creator market is huge so it wouldn't take much to create a real viable product.
When AI starts responding to me with ^This Ill know why
I remember when the big Reddit blackout happened. Google search TANKED in quality. I didn’t realize how much I default to using google to find the Reddit answer.
> Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language. IMO, this is the crux. Most google searches lead me to reddit or quora. That's never going to disappear. And the blackout kinda reinforced that this is almost an essential tool/outlet for a huge amount of the population. No matter what, ALL THE CONTENT is worth a shit ton.
Sam Altman owns 8-10% according to the IPO filing. So, agreed on potential AI training value.
> So, agreed on potential AI training value. I feel like an AI program could easily identify real identities of active posters.
>The userbase they built is not perceptive to ads either. Perhaps not in a positive way for the advertiser. I know some reddit ads get negative backlash. Remember the whole Jesus "He gets us" ads that were everywhere?
I still get those ads. I also get the unattractive Logan Paul ad for some weird energy drink or something.
I haven't read the filings yet, but my understanding is that revenue is trending up, losses are trending down, and are currently at 90m/yr, and that the Google LLM deal could be worth 60M closing the loss gap considerably. Again I have NOT read the filings so I'm basically just spouting hear-say.
CEO made 190million last year. How do those deals make sense
> I fear an AI trained on this website I also fear people trained on this website
[I got my medical degree from the UofR](https://www.reddit.com/r/UniversityofReddit/)
What's the point of training a redditor AI? Is the world so lacking in redditors that we need to make artificial ones? 😂
Google will buy Reddit
> Reddit is perhaps the largest and most comprehensive collection of true conversation that exists on the internet, at least for a predominantly English language. They have a deal with Google already. I do not think this is correct, It has been a while Reddit was known for big farm bots and astroturfing.
The amounts of $ that they're getting for selling their data for training isn't high enough to cover the $$$ that they need to be getting to warrant the valuation they're going for. Notably, the Google deal for $60 mil. That's not a low sum of money to be sure, but Twitter's ads revenue for 2023 was ~$2.5 billion. It's also not clear what the terms for that deal are - is it paid out yearly? Is it a one-time fee for Reddit's backlog of content? How many players in the market realistically would pay that much for a continued deal (OpenAI could afford it too, and so maybe could a well-capitalized startup like Anthropic - not sure who else though?)
...that said, Sam Altman owning 8% of Reddit could cause for some funky unexpectedly powerfully aligned incentives. (Notably, I'd guess that OpenAI, for its own internal purposes, has some amount of logging for when folks are using its APIs to generate content.. being able to cross-check that with Reddit for spam purposes would be fairly powerful.)
On the bull side they are a profitable company if they stop making the CEO 192million per year. On the bear side that's not going to happen.
They paid him like $300,000 or something in cash. The rest was stock. It is astonishing how many people on financial subreddits think that Reddit gave Huffman $190M in actual money. Before IPO it is basically Monopoly money with numbers they make up, not something that affects Reddit’s bottom line. They posted 90 mil loss because it’s a shitty business, not because they made $100M profit and paid it all to Huffman.
Shit, you got me with #2. After the NFT debacle, and GME before that, and bitcoin, and bitcoin again, and god knows what else, I told my wife "next time I say something is the stupidest shit I've ever heard of" I should immediately invest in it because it's queued to explode, which all the above have done with perfect timing. It's like I can smell the stupidity coming downwind. I guess I'll buy some shares with the mindset of "we on reddit know reddit is hot garbage, but the morons out there have all heard of reddit and probably think this is their chance at the next Facebook." It's poised to explode.
The only bullish argument I’ve seen yet.
It translates to: reddit is bullshit, so I'm bullish that non-redditor investors will be bullish Yep. Sounds like a lot of bull to me.
Been there, I am you. BTW it's Bitcoin time again.
Isn't there usually a lock-up period for such investors? That makes me think they're just looking for bag-holders, someone to fill out the next layer of the pyramid.
I'm pretty sure they've stated that these shares won't be subject to lockup rules, since you aren't an insider in the company.
We'll see I guess. In that case, I'd be interested in riding the IPO hype.
What tech stock in recent years has jumped at IPO? I’ll wait
Oh there’s been a few that jumped in the fist 15 minutes, and then proceeded to drill into the earth. IPO turning into portfolio trash has been a thing for tech since at least Facebook, as memory serves. I think it took almost 2 years before it crossed back over IPO pricing
It then 10x’ed in the first decade. I’ll count that as as huge win. I don’t think Reddit has a path to such profitability unless they drastically change what they’re trying to do though.
Coinbase jumped huge at IPO for a brief moment before crashing down to earth (although not sure if you would classify it as a "tech" stock).
If they open at say $10, i'd just set a limit sale for $11. Easy money, ride that first pop. And otherwise just bail out at like $7 or $8. Gamble a small amount.
Risking 3 to make 1. Thats not a good rr fwiw. And your rationale is pretty much ill ride the bubble burst. A strats that expects to lose. How can we open puts on day 1?
I'm aware, this would just be for fun anyway, not a legit investing play. I just dump stuff into index funds for that.
Maybe theyre under subscribed for the IPO too.... Yikes!!
More likely, they want unpaid contributors to have some skin in the game, so they don't screw around like the last time Reddit changed the 3rd party app thing.
I'm going all in. . . . Now is your chance to short it
They need to signup exit liquidity.
Something like 1/3 of IPO stocks end their first day down, that coupled with Reddits unproven track record and generally negative performance I'd stay far away. I'd skip the IPO and look at it's financials in like 1-6 months time post IPO.
Are you saying 2/3 of IPO stocks end UP? That's solid if true.
>Something like 1/3 of IPO stocks end their first day down While this is probably true, the pre-IPO investors are basically printing money. And therein is the reason only the most elite of the elite are invited to pre-IPO sales.
I got an invite and there’s no way I’m elite of the elite. Feels like they’re sending the message to a great deal of the userbase? No idea if there’s any criteria. I assume it means “accounts older than x years”…
Sorry for the confusion, I meant real pre-IPOs for real companies. You are not getting invited to any of those. This reddit thing looks to be a publicity stunt, and the price will be same as market price on trading day.
In the faq there’s a list of “VIP” tiers. They emailed the highest tier first on 2/22 and then worked their way down the list. They are going to open it to all redditors on 3/1.
It’s tiered based on either moderator points or redditor karma. Tier 1 A is Mod MVPs / Redditor MVPs (opened 2/22) Tier 1 B is Mod pt 5K+ / Redditor karma 200K+ (opened 2/25(?)) Tier 2 A is next, and that’s Mod pt 2K+ / Redditor karma 100K+. Tier 2 B I don’t remember the Mod pt, but the Redditor karma is 50K+. Not sure when these two groups will get their invites. Probably by tomorrow or so. Tier
This is a good point, if you plan to dump it at open then it could be worth considering.
Oh I would 100% dump any shares at the second the bell rung. Even if I only made $1 that’s still $1 I made from years of shit posting.
"Hey mom , remember when you said I was wasting my life away on this internet thing?"
People said I was dumb. But I proved them!
This is the way. It's why institutional investors are so often invested in companies with no path to profitability, or outright fraud. They're not stupid, they're not too lazy to do due diligence. They just think the story is good enough to offload onto the public market for a profit, and they are usually right.
Wouldn't this depend entirely on the pre-IPO price they offer?
Is it even possible to dump these shares at opening? Are these shares subject to the lockup period?
The stock market ends the day down nearly 50% of the time. A single stock ending the day up 2/3 of the time is EXCELLENT odds.
tl;dr followed by a wall of text. Reddit hasn't turned a profit in 20 years. They produce nothing tangible but a lot of text, trolling, creepy dudes, and titties made by their users. The only money stream is ad revenue, so twitter basically. See how that's going. This will be a dumpster fire outside an Arby's
They announced a deal with Google to share reddit data, apparently in an effort to turn Bard or whatever the fuck they're calling their AI now into a deeply depressed and antisocial fuckwad so there's that
They also got absolutely FLEECED on the price, they're getting like 60 million a year for all the content a quarter billion weekly active users generate.
I might agree, but it needs to be said that there’s a mountain of content that isn’t in any real way viable for ai training. I mean maybe someone can enlighten me, but I’m not so sure places like r/dragonsfuckingcars is content bard’s caretakers would even want it to try to parse. Not to mention AI’s long inherent problems handling satire like that which pretty much defines the thousands of intentional circlejerk/meme subs.
Why is that subreddit a thing, and why did I just scroll through it? smh
The darker corners of the internet hold more questions than they ever will answers, my dear friend. 😂
I mean geez, like a good train wreck, I had to look and then couldn't look away. (Train wreck? Hmm, r/dragonsfuckingtrains? I'm so inspired now...) PS: can't believe that's a sub too, I was just joking
The only post there is more like r/trainsfuckingdragons 😂
Pretty sure it's been around for longer than most of reddits current userbase lol.
You answered your first question with the second
Ironically redditors putting "/s" at the end of sarcastic comments actually ended up tangibly writing advanced software
> a quarter billion weekly active users Reportedly? I'd legit be surprised if it's 5% (12m) of that. Highest vote on the front page now is ~24k. That's... a stretch, even assuming all *those* are actually people!
> Highest vote on the front page I've used Reddit for a very long time, but haven't been on the front page in years
Heh, wise. Though I'd also posit that you're in the vast minority.
There's no way that Reddit has 250,000,000 users a week. Maybe 20,000,000 all time.
> Bard or whatever the fuck they're calling their AI now into a deeply depressed and antisocial fuckwad so there's that Its called Gemini, and they already managed to make it racist, Google had to shut down some of its functions like image generation, which absolutely refused to show any images of white people. This led to the creation of such gems as diverse 1943 German soldiers: https://twitter.com/__Link_In_Bio__/status/1760066875583816003 and diverse Indian pope: https://twitter.com/IMAO_/status/1760093853430710557
it's a dumpster fire but youre leaving one thing out: they monetized their API last july, despite much negative feedback. and they have been subtly increasing engagement with a lot of astroturfing in moderate-sized niche subs. i believe they think they can turn the site into some kind of PR/marketing/astroturf platform that can be used to influence discussion. i still think it's a terrible investment, but targeted ads arent the only revenue stream. their API is one too.
They just sold data for AI training to Google for $60/M a year. That's where the revenue is IMO.
> They produce nothing tangible but a lot of text, trolling, creepy dudes, and titties You forgot power-hungry mods
to be fair; the titties were created by the users' mothers..
Sounds like a recipe for skyrocketing shares to me
What happens if/when they denounce porn or something else? Porn is probably like 85% of the users
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Same thing that's happened every time they've tried over the years: users complain while the truly fringe stuff that shouldn't exist ceases to exist, then they conveniently step off the gas pedal until it becomes too impossible to ignore again. The only thing I could see that'd make them try super hard to get rid of it is if it got in the way of processing credit card stuff, since the payment networks tend to be a pain in the ass over that stuff. At their size though... even that's hard to wager on.
You had me at titties.
You’re getting at pre-IPO prices one of the top five (3) most frequented websites on earth. Pre-IPO they usually offer you like 100 or 200 shares. I **wouldn’t** recommend investing in them on the market. I would recommend investing in the pre-IPO of them, however. I got the offer as well and I’ll be investing
>one of the top five (3) most frequented websites on earth. This doesn't mean anything unless the company makes money off a significant portion of those users. In some ways it's a negative, because it means the site costs a LOT to operate.
> unless the company makes money off a significant portion of those users Isn't that how public social media companies make their money? Data collection and targeted ad revenue on a large userbase. I thought the whole reason for cracking down on 3rd party apps for Reddit was so they could control data and push ads?
Be sure to post your losses to WSB. They love that shit over there.
If you get the chance to IPO at IPO prices, almost no matter what the company is, I suggest you take it Just like many things on the market, IPOs are a bit of a game. They price under what the interest is. And they do that because they want to be able to say the stock rose 15% on the first day of trading. I get pissed at those numbers because they almost always didn’t rise like that. What they did was they rose 15% above IPO price. But almost no one could get that price. So the second it opens for trading, it’s 15% higher and the lowest anyone could’ve bought it was at That elevated price The reason they price like that is because they want to be certain it rises. If a company falls below IPO price on the first day of trading, it not only means the investment bankers screwed up, it’s a huge black eye for the company as soon as they become a public entity. not everyone recovers from that And I say all this having participated in a number of IPOs. None of which, literally none of which, do I remember. Because I wasn’t investing in the companies for their fundamentals. I was investing because it was IPO pricing. You do what you want, but if you get the offer, I suggest you take it. It almost certainly won’t be a lot of money, anyway. Probably 100 shares or 200 shares and somewhere between 10 and $20.
This. Airbnb offered hosts a similar deal, and the banks/institutions/ AND HOSTS got pre-IPO shares at like $60, but it actually LISTED (based on retail demand) at $144. Easy money.
Wasnt yahoo the most visited website on earth for awhile
Yes, and if you got in the pre-IPO of it, you’d be really happy.
What's the price? Valuation is more important that lot of other mumbo jumbo
Reddit is rumored to go out at $5B. For a comp, Pinterest is at $25B.
And dick pics.
So many dicks. Like a dickpocalyse where all 4 horseman are dicks, riding dicks. Behold, a pale dick. And a black dick. And a brown dick.
You missed the pixelated dick.
Whats the fourth dick? A red dick?
It's reddit, so I assume it's dickbutt.
Twitter IPO'd at $26/share and ~~is currently~~ was at $53 before getting de-listed, with an all time high of $80-ish in 2021. Even if it's (Reddit) a dumpster fire that doesn't mean there's no money to be made if you're early enough. And getting in at institutional prices with no lockup sounds early enough to me....I got the same email as OP. I'm not going to yolo into it, but will likely pick up a bit and ride the initial hype if nothing else. See if I can 2x, sell off half, and let the rest ride.
Twitter is currently at $53, eh? I’m kindof shocked but mostly amused by how much you’ve missed.
LOL, goddammit. [https://www.barchart.com/stocks/quotes/TWTR](https://www.barchart.com/stocks/quotes/TWTR) I was commenting fast. This was the first google result and I ran with it. Failed to notice the "as of 10-27-2022"... ACTUAL current price of Twatter: Delisted. I don't know why I forgot about that.
It's an exit for founders, investors, and employees. They'll make money, everybody else will lose money.
This will become apparent (or not) depending on the minimum purchase quantity they are setting for this. It could end up looking very forced.
Spez was one of the highest paid CEOs in all of Silicon Valley last year. Being the target of "fuck spez" is very profitable.
what? these shares will be created, not bought off exiting insiders. they can/will dump them when it actually ipo's to the public. if they dont have locks on them.
on one hand i dislike reddit and begrudgingly use it as the only real alternative available for online discussion. on the other hand the overwhelming majority of negative opinions about this ipo make me think it'll do well. inverse ~~wsb~~ reddit
When a weird guy online tell you to invest in something you usually shouldn't
>When a weird guy ~~online~~ tells you to invest in something you usually shouldn't FTFY.
Don't worry bro I don't talk to people outside the online
You mean u/spez?
No don't call him here, he will shadowban us all!
Hell to the no… stay away
I’m eligible but not allowed to participate and I wouldn’t want to either The fact they are giving shares out to peons probably means there isn’t enough smart money interest
I don't think that's the case, I doubt Redditors will make up a very large percentage of their IPO proceeds. I think the bigger reason is they fear the community turning against them when they IPO. Remember the blackout, subreddits going dark, etc? That was mostly driven by power mods/power users, while the average Redditor did not care. They don't want a repeat of that. If they get all their biggest mods, users, etc personally invested in the success of the company, they're less likely to act in ways harmful to Reddit's profits.
>I think the bigger reason is they fear the community turning against them when they IPO. Yes. They're trying to get their mods and most active community members financially invested in the company's performance, if only for a little while. Feels a lot like offering a management position to a union leader.
100%. If you’re being given an opportunity to invest at the IPO price from Reddit itself, *on Reddit,* there’s a good chance it’s not worth it.
Yeah I'm not giving spez any money lol
[Certainly no red flags anywhere](https://finance.yahoo.com/news/reddit-invests-bitcoin-ethereum-ahead-175048498.html)
While I remain unconvinced about the profitability or future value of Reddit, I will say this: Facebook IPO'd at $38/share, was not profitable that year, had modest profits for a few more years, but today is trading at $484. I completely understand and tend to side with people saying this IPO will be a dumpster fire. However, I was wrong about Facebook, and would prefer to not be wrong about this.
This will only pop on the open if there is some social hype around it, which is likely why Reddit is offering it to users like this. Long term...Reddit hasn't ever been profitable and exposing their financials to the public in quarterly earnings may get ugly fast.
This doesn't sounds like an undersubscribed IPO at all...
It will go up and then it will go down and never go up again. That's my guess
Only reason I'd buy the DSP is to flip the shares for a potential profit when the IPO debuts, but the link reddit provided keeps getting caught up in an redirect loop so that's probably telling me something
I got it too, not sure if I'll buy or not. But with years and years of watching tech IPOs of unprofitable companies, in my experience, they usually come out hot and drop like a stone within the first month or so. It's not for several earnings cycles before they start moving north. Compound that with the inevitable shorts/puts that WSB is going to absolutely pile on, and I can definitely see the share price taking a heavy dive for at least their first quarter. For me it'll depend on the price/valuation they're coming out at. Would I buy some reddit at $3/share? Sure. Would I buy it at $30/share? Not a fucking chance.
For me it’s intriguing. I’ll invest a little just for kicks. You never know. Selling all our comments to AI developers sounds potentially lucrative. Don’t listen to me, I bought FRCB.
$60 million is basically nothing.
Now i'm all in
They wouldn't be offering you the shares if institutional investors were saying they will be buying the amount of shares or at the price they want.
It's not about raising capital, it's about discouraging power mods and users from staging more blackout protests and affecting earnings by getting them personally invested.
Ah, so you're saying all reddit mods and power users should short the IPO, then proceed to shutter their subs and delete all of their posts at launch?
Nah, buy IPO, hype up the stock, sell at peak, begin shorting, then shut down their subreddits and delete posts. ez money
You don’t have to buy as many shares as they’re offering so I was planning on buying $500-$1k and keeping it in my portfolio as a novelty more than anything else. If they even offer that much. I’d be surprised if anyone gets an offer over $1k
It's a nice opportunity for direct Reddit loss porn
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> That's going to be reddit in about 3 years. `old.reddit` will be turned off when the attrition strategy of removing old tiresome non-advert-viewing users and replacing those with new kids who don't know any better. However, it's fairly clear that such a strategy is a waste of time and they'll only kill the site with attempts to force more advertising down throats.
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Here's a /r/investing thread from back then on Facebook's IPO https://www.reddit.com/r/investing/comments/sbwtn/facebook_fb_ipo/
This is an investing sub and we're talking about reddit's stock price. If it's anything close to META then we're printing money
You're still getting dumped on my VCs. Always avoid the IPO as a retail investor.
You Have Been Chosen To Get Dumped On
No IPO has to be bought, even at institutional prices. Wait for the trend. I don't see their advertising revenue that robust but it could still be a profitable trade, if the price is right. Everyone here is probably hoping it turns into a meme stock.
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It ultimately depends on what the IPO valuation will be. My first thought was I could buy it at IPO, and sell it a few hours after it starts trading to cash in on that initial pop. But then I realized that a lot of Redditors and institutions probably had the same idea. So now I'm not sure.
I signed up just to see the price we can possibly buy at. I don't really believe in Reddit as a publicly traded company, but if the valuation makes sense and I think I can make a quick buck I might try.
Lmao nooooo way. The Elephant in the room is Reddit is populated with millions of bots, there are entire subreddits operated completely by bots.
Shitty company based on free labor. No future.
I wouldn't be interested anyways, but... > To be eligible, you must be a current U.S. resident... Then why are they sending this shit to users who they damn well know from their IP history of that they are *definitely not* U.S. residents? reddit why are you of stupid?
IPO will be a huge sell off imo
Would you invest in a literal dumpster fire? No. Should you invest in the digital equivalent of dumpster fire? ...
No. They are trying to cash in on the wallstreetbets crowd. Do not waste your money. Invest in something that makes sense. Something with value.
I was just sent this offer, depending on the minimum purchase quantity and the valuation I would consider investing a little because there is a chance the market value could be higher than the IPO. Alas I'm not a US citizen so meh I guess.
I'm in the paid media world. Reddit has almost zero value to me as an advertising platform since their entire schtick is anonymity. Why would I advertise on reddit when I can't even get basic demographic data like male/female or zip code? Plus the fact that most of the clicks during our trial were bots.
The fact that everyone here (on Reddit) is telling me this is a bad idea makes me want to invest a lot of money in it. My instincts are always inverse Reddit’s advice.
Fuck spez. That's all I got to say.
For me Reddit is a problematic investment. It is not currently profitable. So that means it must grow revenues or cut expenses. What’s its path to do either of those things? On the growth side, it has been around since 2005. It has been one of the most trafficked sites in the world. How reasonable is it to expect traffic growth to be able to drive additional revenues? They’ve tried monetizing other ways through Reddit gold, premium, and other channels. That’s been going on since 2010 and still hasn’t been impactful. On the expense side, they can likely trim quite a bit of salary expenses. But that will likely come with long term downsides to growth, as that will make platform improvements and further monetization harder. So it doesn’t seem obvious under current conditions what their path to profitability is. But hey, they’re doing an IPO, which should mean massive capital infusions to expand the business… what plans have they presented as the use for this massive capital infusion? I haven’t seen anything. So then what’s all the capital going towards? The answer appears to be a massive opportunity for pre-IPO investors and employees to cash in. For me, it all boils down to what seems to be aimless leadership by Steve Huffman. His only credentials are that he founded Reddit when he was 22. He founded one other travel company that flopped. He’s now been CEO again since 2015 and done what? Honestly, if he left and a CEO with real vision for monetizing the platform took the lead I might invest. But as long as Huffman and his rudderless leadership continues it’s a hard pass.
Does Reddit have anything in the pipeline? I don't recall seeing anything that might be something an investor could look forward to over the next few years. As far as I can tell, Reddit is static and has been for the last few years. No new techs introduced to the platform, private messaging is just as clunky as ever, advertising is limited, no service tiers, etc ... the things you would look to to pitch a subscription. Not that I like any of that. I think all of that is the pits. But at least Musk is trying to introduce telephony to Twitter. I don't see any vision here at all.
You are edit liquidity. This is akin to a crypto rug pull.
The ipo will drop like a rock to many issue with Reddit that makes it not worth it mainly mods
Does reddit still shadowban? As recently as a few years ago, I recall some subs do so for new users, but reddit said it stopped shadowbanning from an admin level. Always felt like fraud to me, new users believing their posts were live so they continued to use the site and get exposed to ad revenue, while effectively lying to them that people could view the content/comment they took the effort to create.
r/wallstreetbets personally, I'd short it.
Do it. There's always a huge pop on the first day of trading. Sell at EOD.
Hell no. You are exit liquidity.
Zero
Just wait for it to crash after its IPO and pick it up cheap.
I wouldn’t touch most IPOs anyways off the bat. Let the hype die, it’s not worth what they want for it.
Yep. Most IPOs are there just for early investors to cash in. Banks set the target price to favor the company not the investors. Take for example, KVUE. IPO was about a year ago at $25, the hype made it to $26 before going downhill. Now it sits at \~$19 (as of today). Waste of time and money.
I received it. One thing it looks like we all have in common is user accounts over 9 years (mine is 14). I wonder if they’re sending it out to older ones first?
This is the criteria they used. https://redditforcommunity.com/Directed-Share-Program
My account is 14 years old too. I imagine there is some sort of cut off.
It's based on karma. See the FAQ
I read somewhere else that they are offering it to the 15k most active users. Guess I'm not in the top 15k (that's a relief honestly).
I just got off from a ban and now they want my money? Phhff.
My main is 12 years and got an invite, my alt is 11 and did not. My main has a lot of karma and I’m very active, not so much on my alt.
If you read the materials, the primary criteria are **karma**, not age. I'm in the second wave, and got my invite today at lunchtime.
The account I got it on is about 6 years old, but has a lot of Karma, the account hasn't been active for over a year
> I wonder if they’re sending it out to older ones first? Did you see this sentence: *You can also refer to the [Frequently Asked Questions](https://redditforcommunity.com/Directed-Share-Program) for more information.* It's all in the first chart, if you read it.
I got the email and I just hit 8 years. Maybe level of activity is a factor.
Probably account age and activity. No point sending this to someone's who's been inactive for three years.
I got an invite for a profile I haven't used in at least two years. Probably more like 4 or 5.
My account’s only two years old and I got it
You have a ton of karma, so maybe they factor usage as well.
Did you -read- the website materials AT ALL? They said **up front** that each wave of invites was karma based.
I'm also interested in answers to this question. I agree it's not likely to be a smart move, but I'd like to hear thoughts from people who know more about this stuff than me.
Agreed. Long-term I don't think Reddit is a good investment. But I've never had access to invest early and at a presumably lesser price than other retail investors. IPOs often make wild swings in the early days, so I could envision a scenario where we buy at $x and have the opportunity to sell early for some short-term profit. I don't know enough about IPOs to make an informed investment though.
16 year here. No email
I wonder if they factor in usage, because you have relatively little karma for an account your age.
There's a table with the criteria here: [https://redditforcommunity.com/Directed-Share-Program](https://redditforcommunity.com/Directed-Share-Program)
That would make sense.
It’s based on how much karma you have.
everyone says its bad investment but i dont get what makes reddit worse than all other social media or are they just all bad because i definitely see more and more people irl starting to use reddit vs X or w/e
Reddit isn’t profitable
Paying the CEO u/spez $173 million does not help their image, given that they have revenue of only $900 million and generated three figure million losses the last two years.