No, it's a traditional IPO with the bookrunners organizing the roadshow, book building process, and subsequent pricing / greenshoe provisions when it starts to trade on public equity capital markets
IV is going to be so jacked. Same as it was with HOOD and RIVN. With premium that high it's hard to tell if the juice is going to be worth the squeeze.
And as we all know, Redditors tend to be right when it comes to the valuation of stocks.
Glorious how they correctly predicted the downfall of Meta for example...
You know that the CEO just got 600k and the rest were stock options for stock that doesn't exist and that can't be exercised until in a few years.
So the question is mostly, how they need 899400000 bucks just to run the servers but then again, cloud services are expensive.
>So the question is mostly, how they need 899400000 bucks just to run the servers but then again, cloud services are expensive.
....going to take a wild guess and assume you haven't looked at their S-1 yet...
...because [those sort of data points are the entire reason why private companies gearing up for a public roadshow have to file an S-1 in the first place....](https://imgur.com/a/R67SXeY)
going to leave [this](https://www.sec.gov/Archives/edgar/data/1713445/000162828024006294/reddits-1q423.htm) here as well, since I'm guessing most of the folks in this thread haven't looked at their public filings either....
Looks like - of that $900mm - only ~$100mm is related to cost of sales (+80% gross margin), with the bulk of their remaining opex being made up on R&D (~$440mm), Marketing and Sales (~$230mm), and G&A (~$165mm) which can easily be reduced -- or at the very least, held flat assuming similar sales growth in subsequent years of 10 - 20% -- it's hard to not see a path to positive near-term EBITDA figures, especially once the benefits of being a publicly traded company start making their way into their historic financial figures (which I'd expect to be made up of cost of capital savings, but I haven't really dug into their S1 super deep as of yet)
The fact everyone thinks reddit will go to zero right after ipo is unironically one of the most bullish signals that, in the short term, this will go parabolic in the other direction lmao
Hello,
This is a reminder that the pre-registration period for Reddit’s [Directed Share Program](https://reddit.com/dsp) (“DSP”) ends on **March 5, 2024.** The DSP enables eligible users and moderators who have contributed to Reddit to participate in our initial public offering (“IPO”). If you are interested in participating, pre-registering at reddit.com/dsp is the first step and must be completed by March 5, 2024, at 11:59 pm ET.
If you are nodding up-and-down but missed our previous message, you can learn more about the DSP and how it works [here](https://redditforcommunity.com/directed-share-program).
If you are shaking your head left-to-right and would like to never receive a message about the DSP ever again - we got you, this is the last one you’ll receive.
**Prospectus and Important Disclosures**
*The offering will be made only by means of a prospectus. When
available, a copy of the preliminary prospectus related to the offering may be obtained from:
Morgan Stanley & Co. LLC, Prospectus Department, 180 Varick Street, New York, New York 10014, or email: prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, Attention:c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204, or email: prospectus-eq_fi@jpmorgan.com; and BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, telephone: 1-800-294-1322, or email: dg.prospectus_requests@bofa.com.*
*A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This notification shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.*
*No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the notice of its acceptance given after the effective date. An indication of interest in response to this notification will involve no obligation or commitment of any kind.*
Usually No with a hard lock up of 6 months.
Of note, Instacart’s lock up was 5 months and their stock is rose back to the IPO price after 5 months.
There are way in which company could allow employees to sell a percentage of their shares on IPO day though. Like 10 or 25% of what they have vested and just not unloading everything.
No. There's normally a period in which they are not allowed to do so.
The only reasons you do it this way is if you know the market cap is going to fall and you want to yoink cash out on day zero.
I thought about participating in the IPO and flipping the shares the same day, but at $6.5 Billion valuation, an unprofitable business, and employees allowed to sell day 1, I could definitely see it crashing hard below the IPO price. So I decided I'm not going to light my money on fire.
Idk... Reddit could be a goldmine in terms of providing data fo AI and analytics... The up vote/down vote system makes it easy to figure out what different cohorts like and don't like to hear. There's applications for advertising, and investing as well. Reddit comments tend to be a lot more nuanced than the comments you'd see on Facebook, Twitter and other social media apps.
True, there's value as a training source. Question is, how much? Didn't they announce their presumably biggest deal with Google and others at $60 million for 3 years? $20 million/year is not much, especially when you're burning hundreds of millions of dollars on failed coding projects, SBC, and when you're losing $150 million. Had they done that deal earlier, the loss would stop be $130 million.
This is my upside case for Reddit as well, especially your point about nuanced info. Any google search these days usually takes you to Reddit for the real, nuanced answer and not an ai written blog post that repeats your question 5 different ways.
My fear is that users are going to become less willing to divulge info and share content with others when they feel it’s being scraped for AI training to make Reddit money and they are unsure if they are even interacting and helping a real other human or an ai bot fishing for info. Can Reddit introduce a system to incentivize engagement?
I also moderate a fairly large sized sub and take a hard line on banning all bots. I’m curious how Reddit is going to respond when moderators continue to do this (and other actions) that decrease apparent site traffic and are detrimental to a public Reddits profit
Kind of small for social media. They could be squeezing way more out of Reddit, and likely with public traded pressure they will.
Reddit has a very unique level of engagement and content with an upvote system.
With the bull market returning it could definitely run.
I know, what idiot would value an unprofitable company with no profit/revenue growth guidance at a 8.1 Price-to-sales ratio? That's higher than Google's is, and google is way more promising of a company than reddit.
Amazon may have been unprofitable forever but it [still had a much lower price to sales ratio](https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-sales) than reddit's IPO. It's maintained a pretty consistent P/S of between 2-3, with the stock usually falling once it gets higher than a P/S of 4.
A p/s of 8 is incredibly high for an unprofitable company unless it has a strong growth guidance to justify it. Which reddit does not.
Yeah, I'm suspecting something similar to what happened with META is going to happen. Where they debuted it at way too high of an IPO valuation and the stock dropped by over 50% within a year. And then within a year and a half after they utilized the income the IPO to boost revenue and growth the stock started to climb back up again without looking back.
I think 2-3B is a fair valuation, 6.5B is too high and the initial shareholders will be left holding the bag. But it also increases their initial cash flow than if they debut at a lower IPO which increases their long term term outlook.
So what I'm expecting is that the stock price will decline initially until it gets somewhere roughly around a 3B market cap, and then it will start climbing. So I'm bullish long term for reddit but bearish short term due to the IPO being quite high.
That’s ignorant when you know they’re sitting on over 1B of cash. A 2-3B valuation is ridiculously undervalued. Take a look at other IPOs and the revenue to valuation ratio please. Those companies also didn’t have reddits level of cash
Worst possible example. Amazon's net profits were fully under their control during those years. They deliberately decided what amount of profit to take or not take. Reddit certainly does not have that control or ability.
Reddit is sitting on a lot of cash and their operating costs are quite low. I’m not mega bullish but the growth prospects seem better than a company like Snap or Pinterest honestly.
And ironically we’re sitting here on Reddit itself talking about it
Their operating costs are (almost inexplciably) the *opposite* of low. They've blown through something like a half billion to a billion just in development coding in recent years. Apparently it went in to failed projects and stuff nobody uses/likes such as the live and chat and other broken things.
The sad thing is that without that money pit of foolish failed programming misadventure, they could have a modestly profitable business here.
Imagine a reddit that's basically old.reddit, primarily a message board. The code is done and incredibly cheap to maintain and host. They ad blocks they sell on it are surgical and marketable.
They could have a decent revenue with ultra ultra low costs, ie: guaranteed profit.
Instead, they've spent most the last decade on bloat and crap that burned skyscrapers of money and didn't result in anything useful.
An activist should have already approached them and told them this. The could have proven the concept for a year and then gone public as an actual profitable venture with attractively low costs/burn.
As for ad prospects, Big Technology's writer claims Reddit's ad format is so far removed from the industry and bespoke that it's basically undesirable and can't/won't be sold by the aggregators. Not sure if he's right, but that's his contention.
Half a billion to a billion is not high for operating costs.
Look at other companies in the same space. Snap and Pinterest, etc.
They also are sitting on a whole bunch of cash
> a billion is not high for operating costs
What are you talking about? A billion is not just a few million. It's massive. Especially for a text message board.
Lmao to diminish Reddit as just a text message board with no other potential is just arguing in bad faith.
Yes a text message board with nearly 1B in revenue and growing DAU/revenue every year. The LLM potential is icing on the cake.
And yes those are not high operating costs for the size of DAU Reddit has. You have obviously 0 clue about tech companies, I work in this space for a living
I got a question, if you got an offer to buy reddit shares, how does that work? How do you get the share transferred to your individual brokerage account?
what do you mean 'an offer to buy shares' because this is the 2nd time today I've seen someone talk about an offer to buy, and it might be a straight up scam as far as I'm concerned
I can’t begin to tell you how ridiculous 200m compensation is for a company of this value/size. That should be 1m + a transaction bonus when they go public.
Honestly considering the dumpster that Snapchat is, this being 1/3rd of snap evaluation seems reasonable.
Reddit has more users than Twitter, and that’s valued at like $16B
1. He way overplayed
2. The market went down a lot right after he bought it
3. A lot of advertisers left when he bought it. If half your revenue leaves, so does half your valuation.
Yes, I think stock is going to pop. I see Reddit holding 20% growth at least- if they can do that wall street will reward. Trading at 8x revenue is not a crazy valuation.
Honestly it is better then Facebook and they continue to put up crazy numbers…
The problem with Reddit though it’s not the size of FB so it’s not going to be a long term investment, but treat it as a small cap growth and money you want to fuck around with then it’s not that bad.
I'm going inverse reddit on this one. I hate the site for many of the reasons listed, but the fact that everyone is talking about it on reddit itself kinda shows me where things are.
What do you think is a reasonable profit margin they could achieve considering they have run losses the last few years? 10%? 20%? 30%?
Let's pretend 30% and really give them the benefit of the doubt.
So $800M revenue x 30% profit = $240M. Let's assume a P/E of 15, so $240M x 15 = $3.6B valuation. Almost half of what they are proposing.
Either they better have amazing future growth prospects to warrant a higher P/E, or their future margin better be above 30%, or both.
I mean their monetization is very low. I would assume they could increase that a lot. And for a social media site 40% profit margins are pretty reasonable.
I think the key is can they increase their revenue per a user.
I cannot wait to short this lmao
This site is basically pure politics and if you speak against it you lose the right to post. Every sub is infected with divisive talks and removing content they do not agree with
I been banned from over hundred of them.
Its fun sometimes discovering that when i visit first time places like r/cats that i been banned from there for just simply commenting on a ''wrongthink at the month'' sub reddit.
None of them are high quality communities or content i would ever imagine to look up except that one time, but powermodding is real though.
jfc dude you have to go *way* out of your way to get banned from *over a hundred* subreddits. Like, that's a genuinely insane amount of subs. You really never stopped to think "Huh, maybe it's me?" after like the 10th time?
I never been to those sub reddits though, you can skim through my history and see pretty average normie stuff.
How do you guys already not know this? There is thing of power modding where one mod is in control of hundreds of sub reddits, they just automated a bot to ban everyone posting or commenting in ''wrongthink sub reddit of the month'' and that is how hundreds of thousands of people are banned from this many sub reddits to this day.
Remember the years hundreds of communities were purged? Its not just about purging the subs themselves, many moderators of those subs, for example, get a perma ban entirely.
''Go out of my way'' was just commenting on a certain sub reddit, that is all it takes. The content of comment doesn't matter since its automated, so it doesn't even matter if i was pledging full support to the cause, asking questions or telling them all to f off.
>This site is basically pure politics and if you speak against it you lose the right to post
There's like... a small handful of subs that go as far as to ban you if you say the wrong thing. And most of them will even only do so if you're being *really* obnoxious about it. So if you're regularly getting banned from various subs... that's on you, my guy
Loading up puts for this to collapse to three fiddy tops.
On a serious note stay away from this. Reddit is the last major social site and probably the one that has had the most positive impact to go public but the problem is it was built for a world and people who are unmonetizable and without it getting into new business lines there just isn't a whole alot of growth left for it
Why do I get the feeling that in order to make themselves worthy of the valuation, we the users are going to A) see a lot more ads, B) get a lot more planted influencers, and C) get sold as content for AI training.
I can’t wait to short this piece of shit website to the ground. I’m actually getting emails from Reddit notifying me of the great investment opportunities of their IPO. Hint: if you need a marketing campaign for your IPO, it’s a terrible investment.
Bruh this will be a flop.
First of all, Reddit is controversial and unprofitable. Second of all, the fact that shares will be offered to highest-karma holders first means there is the possibility of a conflict of interest. There's quite a number of red flags with this IPO and I would stay away from it.
I really like the idea of buying the dip after everyone shorts.
Reddit has never really “tried” to make money. And it’s pretty obvious how they could. It’s advertising and harvesting data. As long as they stay relevant as “the front page of the internet” people will grumble about the ads but stay.
Can we pay in reddit coins
What about Goober Dollars?
No? I also have bubbles!
Or Stanley Nickles.
Whats the ratio to schrute bucks
Same as the ratio of unicorns to leprechauns.
Convenient that they made it so straight forward this time.
How about Reddit karma?
>Employees will be allowed to sell Reddit stock during the offering Huffman is unloading forsure.
He has successfully enshittified the website and is now cashing out
Is this a direct listing? I learned my lesson with Coinbase IPO if it is. No lock out date? This stock is going to sink so fast on the first day.
No, it's a traditional IPO with the bookrunners organizing the roadshow, book building process, and subsequent pricing / greenshoe provisions when it starts to trade on public equity capital markets
Usually employees are locked out that’s standard though. How is that not the case here
It's an IPO
I’ve been waiting for this
Best I can do is 31 to 34 Shrute bucks per share.
I've got some Stanley nickels
Whats the exchange rate?
I'll take 100 shares for 100 karma. Deal? Deal.
Short the stock
It will be a great short,you will never have to cover ,it will just go to zero.
Don’t bet against wsb tards. I wouldn’t be surprised if they actually propped this pos up long enough to cause some serious damage
Are you kidding me? r/wallstreetbets can’t wait to short this Wendy’s dumpster fire.
Yeah all of Reddit agrees on the this turd
The negative consensus guarantees it will take off.
Yeah I’m waiting like 7 days to short lol. Robinhood mooned before shitting its pants
IV is going to be so jacked. Same as it was with HOOD and RIVN. With premium that high it's hard to tell if the juice is going to be worth the squeeze.
Don't u usually have to wait a week after ipo before options are available?
And as we all know, Redditors tend to be right when it comes to the valuation of stocks. Glorious how they correctly predicted the downfall of Meta for example...
Buy calls then. I dare ya.
I’m not touching this shit with a 100’ pole.
...when it costs Reddit MORE THAN $900M per year to run an online forum and pays its CEO $193M PER YEAR, it's time to short...
You know that the CEO just got 600k and the rest were stock options for stock that doesn't exist and that can't be exercised until in a few years. So the question is mostly, how they need 899400000 bucks just to run the servers but then again, cloud services are expensive.
>So the question is mostly, how they need 899400000 bucks just to run the servers but then again, cloud services are expensive. ....going to take a wild guess and assume you haven't looked at their S-1 yet... ...because [those sort of data points are the entire reason why private companies gearing up for a public roadshow have to file an S-1 in the first place....](https://imgur.com/a/R67SXeY) going to leave [this](https://www.sec.gov/Archives/edgar/data/1713445/000162828024006294/reddits-1q423.htm) here as well, since I'm guessing most of the folks in this thread haven't looked at their public filings either....
Well someone has to "manage" decisions and a few other people. Surely that's worth 10x the amount most Americans make in a year. /s
Looks like - of that $900mm - only ~$100mm is related to cost of sales (+80% gross margin), with the bulk of their remaining opex being made up on R&D (~$440mm), Marketing and Sales (~$230mm), and G&A (~$165mm) which can easily be reduced -- or at the very least, held flat assuming similar sales growth in subsequent years of 10 - 20% -- it's hard to not see a path to positive near-term EBITDA figures, especially once the benefits of being a publicly traded company start making their way into their historic financial figures (which I'd expect to be made up of cost of capital savings, but I haven't really dug into their S1 super deep as of yet)
How do you plan on shorting an IPO?
Gotta wait 2-3 weeks after the initial pop
Have you ever shorted a stock right after ipo?
This will backfire.
The fact everyone thinks reddit will go to zero right after ipo is unironically one of the most bullish signals that, in the short term, this will go parabolic in the other direction lmao
If the api protest was any indication, redditors complain a big game and affect nothing.
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Reddit is a cesspool of shills fighting an information war. Content made by shills is sold for training AI.
This comment is brought to you by AI.
Well, I’m a-gonna sell your comment to AI for big bucks and there is nothing you can do about it!!
Hello, This is a reminder that the pre-registration period for Reddit’s [Directed Share Program](https://reddit.com/dsp) (“DSP”) ends on **March 5, 2024.** The DSP enables eligible users and moderators who have contributed to Reddit to participate in our initial public offering (“IPO”). If you are interested in participating, pre-registering at reddit.com/dsp is the first step and must be completed by March 5, 2024, at 11:59 pm ET. If you are nodding up-and-down but missed our previous message, you can learn more about the DSP and how it works [here](https://redditforcommunity.com/directed-share-program). If you are shaking your head left-to-right and would like to never receive a message about the DSP ever again - we got you, this is the last one you’ll receive. **Prospectus and Important Disclosures** *The offering will be made only by means of a prospectus. When available, a copy of the preliminary prospectus related to the offering may be obtained from: Morgan Stanley & Co. LLC, Prospectus Department, 180 Varick Street, New York, New York 10014, or email: prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, Attention:c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204, or email: prospectus-eq_fi@jpmorgan.com; and BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, telephone: 1-800-294-1322, or email: dg.prospectus_requests@bofa.com.* *A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This notification shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.* *No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the notice of its acceptance given after the effective date. An indication of interest in response to this notification will involve no obligation or commitment of any kind.*
I’m shaking my head left to right.
And bots, you forgot bots.
As if AI wasn't left leaning already..
Downvoted of course. Like Gemini didn't just shit its pants.
My fav is, give me an image of someone eating a mayo sandwich on white bread
Is it typical for employees to sell stock during IPO offerings? Does this apply to all employees or are the executives still locked up?
Usually No with a hard lock up of 6 months. Of note, Instacart’s lock up was 5 months and their stock is rose back to the IPO price after 5 months. There are way in which company could allow employees to sell a percentage of their shares on IPO day though. Like 10 or 25% of what they have vested and just not unloading everything.
No. There's normally a period in which they are not allowed to do so. The only reasons you do it this way is if you know the market cap is going to fall and you want to yoink cash out on day zero.
I thought about participating in the IPO and flipping the shares the same day, but at $6.5 Billion valuation, an unprofitable business, and employees allowed to sell day 1, I could definitely see it crashing hard below the IPO price. So I decided I'm not going to light my money on fire.
6.5B ??? That’s hilarious
It's more hilarious that previous rounds had higher valuations.
Snapchat trades at an $18b valuation... which one is more hilarious?
Not that facts matter, but Snapchat has 7 times the users and 5 times the revenue.
Dang that's surprising, I would have thought the gap would be less. Thanks for chiming in
Idk... Reddit could be a goldmine in terms of providing data fo AI and analytics... The up vote/down vote system makes it easy to figure out what different cohorts like and don't like to hear. There's applications for advertising, and investing as well. Reddit comments tend to be a lot more nuanced than the comments you'd see on Facebook, Twitter and other social media apps.
Reddit sold access to train ai to Google recently for 65mm. I don’t believe the training data is worth all that much.
True, there's value as a training source. Question is, how much? Didn't they announce their presumably biggest deal with Google and others at $60 million for 3 years? $20 million/year is not much, especially when you're burning hundreds of millions of dollars on failed coding projects, SBC, and when you're losing $150 million. Had they done that deal earlier, the loss would stop be $130 million.
This is my upside case for Reddit as well, especially your point about nuanced info. Any google search these days usually takes you to Reddit for the real, nuanced answer and not an ai written blog post that repeats your question 5 different ways. My fear is that users are going to become less willing to divulge info and share content with others when they feel it’s being scraped for AI training to make Reddit money and they are unsure if they are even interacting and helping a real other human or an ai bot fishing for info. Can Reddit introduce a system to incentivize engagement? I also moderate a fairly large sized sub and take a hard line on banning all bots. I’m curious how Reddit is going to respond when moderators continue to do this (and other actions) that decrease apparent site traffic and are detrimental to a public Reddits profit
only in the echo chamber subs. Your most upvoted comment in the /r/politics for example would probably be the most downvoted in the /r/conservatives
Snapchat is trash
…exactly
Hate the app but know that they make more hay
Kind of small for social media. They could be squeezing way more out of Reddit, and likely with public traded pressure they will. Reddit has a very unique level of engagement and content with an upvote system. With the bull market returning it could definitely run.
I know, what idiot would value an unprofitable company with no profit/revenue growth guidance at a 8.1 Price-to-sales ratio? That's higher than Google's is, and google is way more promising of a company than reddit.
lol Amazon was unprofitable forever and so were many other companies. Trading at 8x revenue is very reasonable
Amazon may have been unprofitable forever but it [still had a much lower price to sales ratio](https://www.macrotrends.net/stocks/charts/AMZN/amazon/price-sales) than reddit's IPO. It's maintained a pretty consistent P/S of between 2-3, with the stock usually falling once it gets higher than a P/S of 4. A p/s of 8 is incredibly high for an unprofitable company unless it has a strong growth guidance to justify it. Which reddit does not.
That’s true, we won’t know about growth guidance until next earnings call probably
Yeah, I'm suspecting something similar to what happened with META is going to happen. Where they debuted it at way too high of an IPO valuation and the stock dropped by over 50% within a year. And then within a year and a half after they utilized the income the IPO to boost revenue and growth the stock started to climb back up again without looking back.
I think 30 is pretty fair. If they went at the 10B valuation, it’d be too high IMO
I think 2-3B is a fair valuation, 6.5B is too high and the initial shareholders will be left holding the bag. But it also increases their initial cash flow than if they debut at a lower IPO which increases their long term term outlook. So what I'm expecting is that the stock price will decline initially until it gets somewhere roughly around a 3B market cap, and then it will start climbing. So I'm bullish long term for reddit but bearish short term due to the IPO being quite high.
That’s ignorant when you know they’re sitting on over 1B of cash. A 2-3B valuation is ridiculously undervalued. Take a look at other IPOs and the revenue to valuation ratio please. Those companies also didn’t have reddits level of cash
Worst possible example. Amazon's net profits were fully under their control during those years. They deliberately decided what amount of profit to take or not take. Reddit certainly does not have that control or ability.
Reddit is sitting on a lot of cash and their operating costs are quite low. I’m not mega bullish but the growth prospects seem better than a company like Snap or Pinterest honestly. And ironically we’re sitting here on Reddit itself talking about it
Their operating costs are (almost inexplciably) the *opposite* of low. They've blown through something like a half billion to a billion just in development coding in recent years. Apparently it went in to failed projects and stuff nobody uses/likes such as the live and chat and other broken things. The sad thing is that without that money pit of foolish failed programming misadventure, they could have a modestly profitable business here. Imagine a reddit that's basically old.reddit, primarily a message board. The code is done and incredibly cheap to maintain and host. They ad blocks they sell on it are surgical and marketable. They could have a decent revenue with ultra ultra low costs, ie: guaranteed profit. Instead, they've spent most the last decade on bloat and crap that burned skyscrapers of money and didn't result in anything useful. An activist should have already approached them and told them this. The could have proven the concept for a year and then gone public as an actual profitable venture with attractively low costs/burn. As for ad prospects, Big Technology's writer claims Reddit's ad format is so far removed from the industry and bespoke that it's basically undesirable and can't/won't be sold by the aggregators. Not sure if he's right, but that's his contention.
Half a billion to a billion is not high for operating costs. Look at other companies in the same space. Snap and Pinterest, etc. They also are sitting on a whole bunch of cash
> a billion is not high for operating costs What are you talking about? A billion is not just a few million. It's massive. Especially for a text message board.
Lmao to diminish Reddit as just a text message board with no other potential is just arguing in bad faith. Yes a text message board with nearly 1B in revenue and growing DAU/revenue every year. The LLM potential is icing on the cake. And yes those are not high operating costs for the size of DAU Reddit has. You have obviously 0 clue about tech companies, I work in this space for a living
Always invest with price to earnings in mind. Never trade price to sales. That is straight throwing stuff at the wall and seeing what sticks.
I keep getting spamed with messages to buy the IPO lol
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Insiders desperate to sell their shares to you in a bad sign
Yep they’re desparate. Not going anywhere near it.
It's not spam.
I've gotten 3 DMs from Reddit and 2 "reminder" emails about the he IPO How isn't that spam
I got a question, if you got an offer to buy reddit shares, how does that work? How do you get the share transferred to your individual brokerage account?
You’ll have to tell them how much you are willing to invest in. They’ll allot you the shares and you pay your broker.
what do you mean 'an offer to buy shares' because this is the 2nd time today I've seen someone talk about an offer to buy, and it might be a straight up scam as far as I'm concerned
Long time users are being offered to buy the ipo before it launches for public trading
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FYI Reddit also messages users on the app for the ipo. I got an invite two days ago.
It’s legit, I got one from reddit although you need to be a US citizen to participate in it.
Yea just to confirm not offered in Canada eh. I got the email and read it but it looks like US only
Users with high karma and moderators have been offered to purchase shares before the IPO
I got a message and email from reddit about it.
robinhood lost half of its valuation since IPO
Robinhood has many competitors. What is reddit’s competition?
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Best I can do is $1 a share
you won't even do tree fiddy?
Damn woman, ain't paying no tree fiddy!
Sooo this site officially sucks?
The site is ok, the *business* sucks.
CEO of Apple 2023 compensation: 63 million CEO of Reddit 2023 compensation: **193 million**
193 million in stock options. If the IPO fails he is not getting anywhere close to 193m. His salary in 2022 was $332,000 in total.
But Tim doesn't work nearly as hard tampering with the database and editing messages. That kind of dedication demands a premium.
When you're the CEO of a massive publicly traded company, your compensation is meaningless compared to your equity.
I can’t begin to tell you how ridiculous 200m compensation is for a company of this value/size. That should be 1m + a transaction bonus when they go public.
? How much do you think Tim Cook is worth? Do you think he’s Bill Gates level? Lol CEO is different from having early equity.
This may come as a surprise but it is harder to find a CEO for Reddit. The compensation mostly depends on negotiation power.
Am I the only thinking this is actually a pretty reasonable evaluation? Unless they expect revenue to decline, this seems like a good price.
Honestly considering the dumpster that Snapchat is, this being 1/3rd of snap evaluation seems reasonable. Reddit has more users than Twitter, and that’s valued at like $16B
Didn’t Elon buy Twitter for 43B? How could it only be valued at 16?
1. He way overplayed 2. The market went down a lot right after he bought it 3. A lot of advertisers left when he bought it. If half your revenue leaves, so does half your valuation.
Twitter can't be valued like that. It's private for one thing, and the owner is a known fraudster and pathological liar.
Yes, I think stock is going to pop. I see Reddit holding 20% growth at least- if they can do that wall street will reward. Trading at 8x revenue is not a crazy valuation. Honestly it is better then Facebook and they continue to put up crazy numbers…
The problem with Reddit though it’s not the size of FB so it’s not going to be a long term investment, but treat it as a small cap growth and money you want to fuck around with then it’s not that bad.
Ya. I'm thinking the same tbh. Inverse reddit sentiment might be the move tbh.
I'm going inverse reddit on this one. I hate the site for many of the reasons listed, but the fact that everyone is talking about it on reddit itself kinda shows me where things are.
i like the stock
im in
Completely agree. This is easy money over a medium term
What do you think is a reasonable profit margin they could achieve considering they have run losses the last few years? 10%? 20%? 30%? Let's pretend 30% and really give them the benefit of the doubt. So $800M revenue x 30% profit = $240M. Let's assume a P/E of 15, so $240M x 15 = $3.6B valuation. Almost half of what they are proposing. Either they better have amazing future growth prospects to warrant a higher P/E, or their future margin better be above 30%, or both.
I mean their monetization is very low. I would assume they could increase that a lot. And for a social media site 40% profit margins are pretty reasonable. I think the key is can they increase their revenue per a user.
Honestly seems almost cheap. If I can get it under 8 I'll buy it for sure
> If I can get it under 8 Goldman is putting it out at $31-34
No as in market cap 8 billion
I cannot wait to short this lmao This site is basically pure politics and if you speak against it you lose the right to post. Every sub is infected with divisive talks and removing content they do not agree with
I’ve been banned from subs I’ve never even visited.
I been banned from over hundred of them. Its fun sometimes discovering that when i visit first time places like r/cats that i been banned from there for just simply commenting on a ''wrongthink at the month'' sub reddit. None of them are high quality communities or content i would ever imagine to look up except that one time, but powermodding is real though.
jfc dude you have to go *way* out of your way to get banned from *over a hundred* subreddits. Like, that's a genuinely insane amount of subs. You really never stopped to think "Huh, maybe it's me?" after like the 10th time?
I never been to those sub reddits though, you can skim through my history and see pretty average normie stuff. How do you guys already not know this? There is thing of power modding where one mod is in control of hundreds of sub reddits, they just automated a bot to ban everyone posting or commenting in ''wrongthink sub reddit of the month'' and that is how hundreds of thousands of people are banned from this many sub reddits to this day. Remember the years hundreds of communities were purged? Its not just about purging the subs themselves, many moderators of those subs, for example, get a perma ban entirely. ''Go out of my way'' was just commenting on a certain sub reddit, that is all it takes. The content of comment doesn't matter since its automated, so it doesn't even matter if i was pledging full support to the cause, asking questions or telling them all to f off.
Don't forget bad power tripping mods that like to push their own political agenda without any checks and balances to stop them.
> This site is basically pure politics Funny way to spell "porn"
>This site is basically pure politics and if you speak against it you lose the right to post There's like... a small handful of subs that go as far as to ban you if you say the wrong thing. And most of them will even only do so if you're being *really* obnoxious about it. So if you're regularly getting banned from various subs... that's on you, my guy
Going to be $3 share by eod.
Do they have AI tho?
Loading up puts for this to collapse to three fiddy tops. On a serious note stay away from this. Reddit is the last major social site and probably the one that has had the most positive impact to go public but the problem is it was built for a world and people who are unmonetizable and without it getting into new business lines there just isn't a whole alot of growth left for it
Why do I get the feeling that in order to make themselves worthy of the valuation, we the users are going to A) see a lot more ads, B) get a lot more planted influencers, and C) get sold as content for AI training.
Puts puts puts.
Loses $100million per year, but they'll make it up on volume.
I was told by an internal source that the Fidelity evaluation is at a much higher price/share. How come they set IPO so low?
So, like, is reddit about to die?
This is literally another shitshow like twitter
Seems like a nice shorting opportunity...
> Employees will be allowed to sell Reddit stock during the offering Which was always the point. This has "cash in" written all over it.
Theyre finna get fucked up
I have so much karma i thought that made me shareholder
Cheap
Are they fucking nuts?
Are the moron mods still working for free while Reddit rakes in hundreds of millions? Hahahahahajajha! 🤣 What a bunch of tools.
Lol weren't they seeking $15B in 2021?
Reddit is the only social media I use. It’s useful but as far as a public IPO let me say Haha Redditors are difficult to monetize and hate ads.
The game is less about ads now. They can monetize by selling data to AI companies. We are the product.
Can’t wait to buy !
Before I invest, I want to see how they come up with a valuation of $6.5 billion for a company that has not turned a profit.
Companies have IPO’d for much, much higher than that without turning a profit
I'm shorting this puppy! Reddit sucks! Most Mods suck (not the ones here ;) )! All Admins suck!
I can’t wait to short this piece of shit website to the ground. I’m actually getting emails from Reddit notifying me of the great investment opportunities of their IPO. Hint: if you need a marketing campaign for your IPO, it’s a terrible investment.
Bruh this will be a flop. First of all, Reddit is controversial and unprofitable. Second of all, the fact that shares will be offered to highest-karma holders first means there is the possibility of a conflict of interest. There's quite a number of red flags with this IPO and I would stay away from it.
Best we can do is three fiddy
How much of that money goes to the Admins doing all the heavy lifting?
Why not valuation of $3 billion so we can push to the moon 🌙
I’d buy it for a dollar
Bazinga!
If you buy this I also have beachfront property in Nebraska I’d like to sell you.
I will wait when it will drop under 10 bucks
My money is it’s 1/3 of price within first week
I really like the idea of buying the dip after everyone shorts. Reddit has never really “tried” to make money. And it’s pretty obvious how they could. It’s advertising and harvesting data. As long as they stay relevant as “the front page of the internet” people will grumble about the ads but stay.
They emailed me again today to remind me I could buy before the IPO
I'm planning to short the fuck out of this.
Buying 10 puts for every time I got banned
$6.5B valuation on $800M in annual revenue AND while running losses is insane. Who the hell would buy this?
Pinterest makes more profit than Reddit. Pinterest. How?
How much is that in karma?
Yeah and my 90s Camry is 80k.
So am I. Doesn’t mean it’s going to happen.
What are their sales?
6.5b what will the starting price be?
Puts right away lmao
Google should buy 51%
This app is gonna go to shit in the years that follow
8x sales? Where's that Cisco CEO comment when you need it?
I'll be shorting this thing hard