Reddit kind of anticipates this critique in its investor docs, and argues that it didn’t really start operating as a serious business until 2018 when it finally started “meaningful monetization efforts” — that is, trying to make money for real.
But that’s still six years ago. What has Reddit been doing since then?
One big, obvious answer: It has been hiring a lot of engineers and spending a lot of money on their salaries…
…What am I missing? I asked Reddit comms for comment but they declined, citing the company’s quiet period before the IPO.
Shortly after they introduced reddit gold, they made enough money to cover the server costs for decades. A few years later, with continued revenue from this (until they scrapped it last year), all the money was gone.
The reason reddit loses money is because it’s poorly managed.
You say that like it’s incompetence.
They’re deliberately lining their pockets with exhorbitant executive pay-outs.
Poorly managed as in stolen. The fucking ceo was paid 193 MILLION. For what exactly???
From the article. Reddit wants you to believe it had $193m to throw at the CEO, to imply they are great at making money. The more people spread this lie the more reddit wins.
That’s a deep misunderstanding of how that number came to be. He wasn’t paid 193 millions. He was paid something like 6 millions.
The rest is shares that he got and kept through the whole period. When you setup a company you create a number of shares that founders buy (with most kept on the side for investors). As you grow so do those shares value, and you’re also granted some as bonus/salary/et . At 10B those share are worth 190 millions. If Reddit would be worth 1 billion those shares would be 19 millions.
Basically he owns about 2% of Reddit.
Almost every IPO in history has resulted in a significant drop in value on the first weeks as early investors drop their shares on the market and hype goes down. I would be surprised if Reddit loses half of its value in the first month alone. It is much less bullish than a lot of other recent IPOs.