Reddit: Return Of The Junk Stock IPO
Reddit: Return Of The Junk Stock IPO
Reddit reminds me of the fast-growing, but highly unprofitable IPOs in 2021.
This is one of those rare cases where what is being said is less interesting than who says it.
What: Reddit stock is junk, the IPO will fail hard, and anyone investing on it is begging to lose money. I believe that most people discussing this in Lemmy already know that, so the info isn't new here.
Who: Forbes. Forbes' target audience is investors; greedy vulture capitalists love it. So if Forbes says "it'll sink!", investors are less eager to buy stock, and that sinks the stonks even further. So what Forbes says is often a self-fulfilling prophecy.
I'm glad that Forbes is doing it. I want to see Reddit die.
EDIT: as other posters are correctly highlighting, I derped - the article is from a "contributor", and it has basically no impact or visibility.
Damn - now I want Forbes shitting on the IPO!
What could have been done to increase the valuation higher and maintain goodwill with the community:
- Cut CEO pay by 90%
- Pay mods as employees, think of the GM/guide structure of early mmos where you start as a volunteer for a free sub but can work your way up
- Subscriptions to remove ads
- Push ads in API for third party apps to host your ads, remove for subscribed users
- Profit sharing from ads and subs with top content creators
More specifically, Reddit notes in its S-1 that, as an emerging growth company, it will:
- present only two years of audited financial statements in the S-1,
- not be required to obtain an auditor’s attestation report on the company’s internal controls over financial reporting requirements of the Sarbanes-Oxley Act,
- provide less extensive disclosure about executive compensation arrangements, and
- will not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements,
That sure sounds like a solid investment
Also, the two classes of shares (new shares get 1 vote per share, existing shareholders get 10 per share)… what the fuck. Why would anyone buy that shit
Great article and very thorough, if you have interest in the subject, I'd say it's a must read, despite the source. And I 100% agree that reddit would be a very risky stock to buy, with more chance of becoming worthless than actually make you money.
This is completely disregarding my personal opinion that reddit quality has deteriorated for years, because sometimes even poor quality can be a great money maker, when it has achieved market dominance or critical mass in its segment, and no doubt reddit has done that.
Extremely well written and put together. Still, as harsh as it is, I think the author was still not harsh enough.
Return Of
It never left, bro.
Ditch reddit, join lemmy!
It's a hard call on Reddit.
This article seems to leave out the reality that Reddit's big win is data and an in built machine learning capability in what is good quality. For future AI and LLMs it's actually a treasure trove of information that will only rise in value.
Realistically it's had massively bad PR and issues but people still use it over Lemmy and many others, and Lemmy/others aren't going to overcome it any time soon (if ever). So it doesn't seem like it's going to go away at end of day, and it's still one of the best sources of information on the internet available.
At end of day it's stocks so it's coin flips all the way. No one beats the market consistently over time that doesn't also utilise insider information.
“[moderators] may be able to leverage their influence within those communities to change the dynamics of the discourse within the communities or to disrupt the normal operation of their communities or other communities on our platform.”
And they can give you rando-bans out of nowhere, suddenly cutting you off from your topic of interest and exposing serious flaws with the entire site.
From the article:
Reddit earns an Unattractive Stock Rating.
Of course it does, have you seen the average redditor?
Absolutely savage