[...] a dearth of profit this late into its existence portends the lack of a real business model, suggesting it’s still not ready for public company life.
Reddit is the biggest grift known to humankind by sheer volume. They do nothing but dev work and that all falls on how to serve ads and not break the free moderating, posting, and commenting.
That's actually the thing that gets me about this whole situation. They don't create the communities. They don't create the content. They don't add comments. They don't upvote or downvote content or comments. They don't moderate their communities. They don't really respond to support tickets, and rely on other users to help others out. That's a lot people they don't have to pay.
Imgur was created because reddit refused to host native images. They refused to host native video. If you change or delete something, they only keep one version as backup. The vast majority of their content is text. Their storage and bandwidth needs should be comparatively minimal.
They've spent decades refusing to upgrade the user experience: RES has all the features reddit refused to make. The moderator toolbox has all the moderator tools reddit refused to make. The apps have all the features and all the disability features reddit refused to make. Their own app is something they bought from the original developer for a minimal amount of money - and then they made it worse.
What are they spending their money on? Reddit crypto was a failure. Reddit NFTs were a failure. Reddit streaming events (RPAN) was a failure. I'm sure they invest money into their April Fool's thing, but how much does that really cost?
What really bothers me is that the original plan for that open source code was to make Reddit federated. They wanted to make it so that other people could run their own Reddit servers for their own communities. Sure, they would have locked it down somehow and tried to make it so that they got paid in the process, but the concept of the Fediverse could have been a common thing over a decade ago already. I'm sure that would have been a far easier walled garden to break out of than the current-day monolithic Reddit is.
They’ve tried to implement features people didn’t want and haven’t seemed to develop a decent business model going forward. Even worse, they destroyed two of the better ways of generating revenue; profit sharing from phone apps and Reddit Gold.
They made a video and picture hosting platform that no one asked for or wanted that likely balloons their infrastructure cost by an order of magnitude.
As someone who had to make headlines for a while: yes. This says absolutely nothing and only serves to confuse. A good headline informs and sparks interest. This does the exact opposite of both lol
Reddit waited out the near-zero percent interest that persisted for over a decade and are now finally pulling the trigger on the IPO with interest rates sky high and investors skittish. The punchline is that the Fed is about to lower rates over the next year, which will make speculative investments more attractive again. They delayed all this time and destroyed the site with all their for-profit changes only to go forward on the IPO at the worst possible time.
This is going to be like Robinhood all over again. It's going to go public. It's going to shoot up in valuation, insiders are going to sell, and then it's going to crash back down.
That’s almost every tech company. IPOs are designed to make the rich richer. They get early access which drives sales, others buy into the hype, and the early access people cash out.
The IPO is the venture capital selling their stake to the public. The private investor who footed the bill makes all the money while the person who had the idea and built the product gets whatever the VC let’s them have. An IPO is simply the rich people selling when they have a minimum viable product with a financial return model that isn’t net negative. They don’t care about their investment, just the return.
I don’t know many investors but the ones I do know would never take a leap of faith like this. This is almost guaranteed money loss. Maybe Steve is fighting against the 1% in his own way. God bless you Huffman, god bless you.
It wouldn’t surprise me if Reddit’s own popular investment sub changes their stance on short selling for this one stock. I’m not sure what it’s been like since the exodusish, but when I was still on there the Reddit IPO was treated as a joke.
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