This is a most excellent place for technology news and articles.
I work in financial reporting, so I have a decent idea of what makes up things like operating profit/loss and Adjusted EBITDA.
This does not look good for Reddit and if the company only managed a $90.8m loss after jacking up API costs, nuking virtually every third-party client, backstabbing every power mod, giving alternatives like Lemmy and Kbin an actual user base and selling off user data to Google, then I fully expect things to get a lot worse on the site.
Seeing a report like that, that they did all these things to raise funds and are still not profitable, is there any reason why anyone would invest? Surely the price can only go down from initial offering, right? Unless the price started very low.
People who invest are betting that the problems can be solved by a new team or when the company is sold to Facebook.
Imagine thinking that about a company that isn't even doing remotely as well as Lycos.
That's right, it still exists and unlike reddit it's profitable.
I'd imagine reddit could be profitable too if they stopped throwing money at stupid shit like NFTs and avatars. Selling API access for AI training was a good move in terms of bringing in income since it basically costs them nothing, and they could have totally pulled that off without pissing off half their userbase.
They could've also called reasonable prices for api access for 3rd party apps and would have a nice revenue stream now instead of the pr shitshow they got.
I don't know how in the hell they let it go as wrong as they did. They had all the eyeballs of the internet. They had all the Google search traffic. They had an API that encouraged tons of other people to make applications that link with them to display their content.
All they had to do was light touch monetization, and slightly stroke the egos of the mods. Every new phone, car, light bulb that ever came out had a place where it could be directed right at the people they want to sell it to. All they had to do was disguise it as an unboxing or a slightly pithy review. Hell, they could have gotten competitors to bid against each other. Chevy could have been on there dissing forward, Ford could have been on their dissing Dodge. They're so many opportunities there for monetization. They have control over their own algorithm.
You’re totally forgetting the part where from the very top down that company is run by total fuckwads.
They’ve fucked up at every single step and remained utterly self righteous throughout.
I don't work in financial reporting, and I have no clue what even EBITDA is...
But even me, I come to the same conclusion!^^
Earnings before interest, taxation, deprecation and amortisation. Interest is classed as other income and taxation is kinda self-explanatory.
Depreciation is spreading the cost of a fixed asset over the course of its useful life. So let's say you spend $40,000 on a machine that you expect to keep for 20 years, and scrap for $1,000 at the end of its expected life. You depreciate it on the straight-line basis (meaning it goes down by a fixed amount each financial year, or depreciate it by $1,950 each year. Straight-line isn't the only form of depreciation. Cars for example go down on a reducing balance basis, meaning their value goes down by a lot more during the early years of their lifespan.
Amortisation is like depreciation, but for long term loans and intangible assets (things like customer lists, patents, etc.)
One would imagine the chief asshole would reduce his 190m payday by 100m to make the balance beautiful before an IPO.
Nah, he wants the money for his doomsday bunker. I'm sure he considers the $93m for the COO to be fair game, though ...
There are 54 pages of risk factors, which, after reading many S-1 filings over the years, seems pretty long. One of the most notable is the sentence, “We have incurred substantial losses during our history and may never achieve profitability.”
Well that doesn't sound very promising for them.
may never achieve profitability.
I'm not an expert or anything, but that doesn't sound like a very good investment.
Because spez insists on chasing the newest tech shiny - but only after it's peaked - NFTs, crypto, RPAN, etc. And although it may yet turn around for him and for reddit, notice that he only jumped onto the AI boom three months after last spring's series of AI announcements, showing that he's once again way behind the times.
Edit: one thing has always struck me since his interview last summer. spez said something like "reddit will continue to be profit-driven until the profits arrive". Like the arrival of profits was inevitable. Like he didn't need to do anything except wait. Just be patient and the profits will arrive in their own time, not like things have to be envisioned and planned and put in place to get profits, just ... they'll arrive. Some day.
It seems a remarkably lackadaisical attitude for a CEO to have.
Didn't spez also say that Reddit was a side project that just got out of hand?
Being a tech nerd does not mean you have what it takes to lead a company to profitability.
This does not stop companies being successful in IPOs and giving share holders lucrative gains. Take Atlassian as an example of a company seen as successful but is not profitable.
Atlassian has not yet posted a full-year profit in its 20+ years
Research and development, at $438.3 million
What in the fuck has Reddit developed in the last year that cost half a billion fucking dollars?
The executive payroll
Hey, it's not easy to make a shitty new redesign of a site. That stuff costs money.
Remember when they killed API access claiming it cost the 10s of millions each year? Turns out they could have just not spent so much on reddit avatars and we'd all still be there today.
An ugly new logo, continued development on world's shittiest mobile app, and a terrible brand new UI for the website (not to be confused with the previous terrible new UI)
Oh yeah, they also did some NFT bullshit, almost forgot about that one.
Those stupid fkn icons or smth
they're selling the ability to harvest data, not provide a platform for anything particularly useful.. they are developing data harvesting tools, including for AI..
Lots of losses but still paid spez a cool $193 million.
For being a complete douche.
Iirc it was $600k as actual payroll, the rest in private stock. But still, fuck the greedy little pig boy.
I receiced one of those special offer emails to buy stocks on Monday. Weren't those supposed to go only to power users? I haven't done anything with my account since the API debacle and wasn't a power user before.
I feel like their rug pull before the ipo doesn't work that good. I hope the gme bros will short reddit to the ground, that would be the best end to Reddit I can imagine. Fuck spez.
I got it on an email address linked to an account that was banned in 2020.
Please don't forget to fill in the form anyway, with fake data. This will let them believe there are more interested users than reality
I was a semi-power user before leaving (13k link karma, 134k comments) and also received the IPO offer per email and per notification. I reported the notification as spam :)
It's so obvious that they want to squeeze some money out before everything goes down the drain.
I got it as well. My accounts were banned... and then all the sudden an IPO comes along and the are unsuspended.... i went back in and redacted my accounts that got the email.
Your comment made me go back and check, and I definitely got unbanned at some point. I was site-banned for mass edit>deleting my comments on all my accounts during the API evacuation. One sub saw me doing it, and banned that first account. Whatever, no big loss cuz I’m scorching things on my way out the door anyways. When I did the same with the second account, both accounts were banned site-wide for ban evasion, (because that second account also had comments on that same sub.) And that same pattern happened with every account I had.
But now they’re all unbanned. I wonder if Reddit went back and unbanned old accounts, to try and boost their user numbers prior to the IPO.
Whole thing is sketchy AF. I hope very few of its selected users falls for the scam invitation to buy early shares. They're not only exploiting them for free content and free moderation, they want them to help pay for Spez's ludicrous compensation.
So, three of my old accounts apparently qualified for the buy-shares offer. Two of them were over the 200k karma threshold to get the offer. Interestingly, the third account had only 191k karma and got the message a day or two later.
Even more interestingly, yesterday a fourth account that I haven't posted to in over a decade received the offer, and this one only had 50k karma. Admittedly, several accounts were mods, but they were mods of extremely small, very inactive subs, and I had de-modded myself after deleting my data. They also sent an email to the my registered email address for the fourth account (but I don't know if that's relevant because none of my other accounts had emails registered).
I'm not sure what's going on. Did they get so little response from the early offers that they're going to the accounts of former mods or lowering the karma requirements? I know a couple of my accounts ended up connected by IP information; did they try to contact my old fourth account by PM and email because it was somehow connected to the higher-level accounts, or because they're getting desperate? Maybe they're just trying to get lots of numbers to show that redditors are eager to participate, to gin up an ignorant public's enthusiasm prior to the IPO?
I have to think that, at some level, they're getting desperate, because it seems so much effort to go to, to dig up an account that hasn't posted in a decade and then send PMs and emails to it.
Why don’t company’s pay their CEOs in exposure and sense of pride? If it’s good enough for moderators and artists it should be good for CEOs.
Why would anyone give money to a business who has never ran in the black after 20 years? Just set your money on fire instead
Dumb people are going to see headlines about “AI” and “the first social media IPO in a long time,” and they’re going fork over money. Also speculators are going to buy after they speculate that other speculators are going to buy speculatively.
Yeah, this IPO will probably go just fine and a bunch of wankers will make a bunch of money. That's what it's all about, after all.
Don't worry, the IPO will not stop the losses. It will just provide a pool for more bonus payments for the management.
Rest in pieces. Federated pieces.
In 2023, the company’s revenue was $804.0 million. Research and development, at $438.3 million, was more than half, an awfully big number for a company of this age.
What the heck are they doing‽
Edit: oops, Semi-Hemi-Demigod beat me to it. Hello, fellow binner!
Anyone else here concerned about what this means for the health of the ecosystem? If reddit was never sustainable and we are well and truly past a phase of consolidation there is potentially a lot of history / info to loose here. The damage has been done already by the funding model. While the return to federation and private hosting is nice, there is a potential "dark" age.
It can't because it's actively hostile to the users that make it its content in favor of recreating a more massive version of the Stanford prison experiment. Although that seems to be a fad to the people naturally attracted to acting out their power fantasies in any sort of reddit-like social network, particularly those who want to act out Minority Report.
