Reddit

Reddit has been around for a very longtime, since 2005 as a matter of fact, and yet all this time... it has never been profitable.

I see that Reddit's stock (ticker: RDDT) is up 18.48% at the time of posting since its initial public offering, and after perusing the internet and this sub-Reddit in particular, I noticed that a lot of people have a lot of hope that for some reason, Reddit is just all of a sudden going to start making a profit soon to justify its kind of wacky current valuation.

I know most of you are living in this current environment like me, and think 20 plus valuation multiples are the norm, but sadly... they are not. Especially for a company like Reddit, that keeps on creating and scrapping different ways to become profitable.

Besides the management of the company being completely greedy and incapable of doing their jobs, I would like to point out a few of their past and current failures to profitability:

• Reddit has and always will be a place for people to express themselves anonymously, the key word there being anonymous, so if they someday decide to take that away from us users in the pursuit of profits, I could see half if not more abandoning the platform entirely.

• Most of us power users still use "Old Reddit", because the "New Reddit" looks, feels, and operates like total crap. Oh, and the telephone application, assuming it's working, is total crap as well. Without converting us, they have no chance of making money off of us, which makes me sadly think that the board of directors will eventually make the call to end "Old Reddit".

• Coins were fun, and we were able to earn them without putting our credit cards into the Reddit system, thanks to other generous Redditors awarding our content, which some awards came attached with the gift of Reddit Coins... which again were awesome! We would use these coins to purchase awards for other users, and the pay it forward effectiveness was second to none, and really made me feel good. Sadly... this all got scrapped.

• Fast forward a little while after awards and coins were gone, and then we get the much hated "super upvote" that nobody asked for. These things literally have to be paid for one transaction at a time, and I believe the cheapest "super upvote" is $1.99. Besides most Redditors not wanting to give up their anonymity, who is going to make 10's of 100's of transactions a day on their credit cards just to award their favorite content creators?

• Then they created the contributor program, which totally forces Reddit users to give up their anonymity assuming they want to capitalize on this new pay for content model. First though, you have to qualify, and I will let you go look at the requirements for qualification, but I could assure you... most of us will never qualify, and even if we do, we'd make like $4.00 a month, and won't get paid out until we meet a certain threshold no doubt.

• Then recently, Reddit and the team decided to bring back awards... well like 20 of the 1,000's that used to exist anyway and married them into their new created contributor program. So, with this means is that if you're not a contributor, which again you would have to give up your anonymity and pass the gauntlet of qualifying to become a contributor, you get nothing at all for your rewards. Why would anyone pay Reddit for awards that only really help them? At least before some of the rewards came along with free Reddit Premium subscriptions or Reddit Coins, but now... they do nothing for "non-contributors", so who cares?

Anyway, that's all I got for now. I really love Reddit, but sadly, whenever companies go public, they tend to go full regard, which makes me sad... because soon we may lose our beloved Reddit due to the pursuit of year over year gains.

Are there any positives to any of this, because I would really like to hear what they are in the comments... thanks!

The market cap is currently at $8B.

There are 73M users.

Half of them are active.

Half of that aren’t bots.

Best case scenario each account represents $109 each.

Realistically that’s $400 an account.

So let me ask you: do you think your account is worth $109 to $400 ?

Puts open on Monday.

Have a great weekend.

Huffman is a libertarian tech bro, and probably prides himself on being a founder of one of the most popular sites on the web.

But he sold way too early before reddit blew up (I'm a near 15 year user of the site and he sold before I joined), and he only made $5 million from the sale before taxes. In Silicon Valley, that's nothing. All the other tech bro startups make the founders 10s if not 100s of millions.

So Steve, who wants to be Mr Badass Bunker Boi, is actually a poor fuck compared to his silicon valley friends. An asshole capitalist like him can't stand this. Me, poor, with my big brain? Never.

That's likely a huge motivation and reason why he came back to reddit. I would bet his number one goal since taking over was to turn reddit profitable and make the IPO so he could finally make the money he thinks he deserves.

The problem?

Reddit has never known how to make money. Huffman is a fucking idiot who lucked into working for Paul Graham and never ran reddit when it was of any actual size. u/yishan is who was at the wheel when reddit ran through its explosive growth post 2009.

Other than founding reddit, and likely only using it pre-2010, Huffman doesn't know the community or how reddit works. He doesn't know how a business works. He doesn't know how tech works. He doesn't know how to lead or manage. He's a guy who hit the tech lottery as dumb teenager.

Reddit has been desperate to try and make money in the past decade, and they have tried and failed at every corner. They've likely burned through all their VC money as interest rates have finally risen post-COVID, and Huffman must be feeling pressures from investors to make money. NOW.

A desperate man in a desperate situation, a narcissistic capitalist who thinks he's more skilled and more knowledgeable than he actually is - is it no surprise that he makes a piss poor decision to overcharge for APIs, and then double down on being a gigantic asshole in the process? He refuses to take any blame or admit fault or error, and will seemingly ride his ship into the iceberg.

Honestly insane how the reddit board hasn't fired this guy after all his gaffes and fuckups over the years. Editing user comments should have warranted a firing years ago.

Oh, and remember how he only made $5 million on the sale of reddit, and the Apollo dev jokingly said "buy me out for $10 million"?

That would absolutely drive Huffman bananas - this 3PA dev working on a reddit app was going to make more selling his product than the founder made for selling the site. The narcissist would never let that happen, even if it was in the best interest of the site to do so.

To put himself and the Apollo dev on the same wealth tier? That's not possible in the mind of tech bro like Huffman. Wealth and money are your value to society, and there's no way some dude making a 3PA should be worth as much as the founder. The Apollo dev didn't realize he had accidentally triggered Huffman's sore spot.

Edit: I've already contacted Reddit admins about this, and they have agreed to set up a one-on-one video call about this issue. They know the issue exists. Please do not spam them about this issue, they are aware.

Fidelity, the lead investor in Reddit’s most recent funding round in 2021, has slashed the estimated worth of its equity stake in the popular social media platform by 41% since the investment.

While I don't want to reveal too much about my real-world activities, I'm pretty intimately familiar with the world of finance (and private equity, etc.) and I am familiar with the major stakeholders of Reddit.

Recently, we've noticed topics like Food, Movies, Music, Books, Videos, Humor/Jokes, and many other categories be completely removed from the 'Explore' interface being used by many users to find content on Reddit.

They have 7 options for community types:

Cryptocurrency, Celebrity, Gaming, TV, Sports, and Business

These selections send users to a wide array of cryptocurrency, sports, and other subreddits.

However, any users wishing to browse for another subject are met with a fully-broken experience that appears to be destroying traffic patterns and user flow, effectively choking off what I'd consider "many of Reddit's best and most well-run communities."

(Hint: They aren't Crypto communities, and yes, this is a sore spot - or blind spot, for Reddit.)

We've tried finding very basic subjects through Reddit's new and mobile interfaces, and have been defeated at every turn.

Here is what the issue is, IMO: Reddit is merely doing a word search for any topics outside of the Crypto Fab 7.

• Want to find a community about Technology? Reddit will show you all the posts with the word "TECHNOLOGY" in them.

• How about Music? I hope you like this r/mademesmile post about "music to my ears" and r/teenagers post about "Gay music lol"

• It's clearly broken. Reddit's being taken in some pretty awful directions, and it's taken a huge toll on their stakeholders, who are - let's just assume - absolutely pissed at what's going on.

How is Reddit responding? By trying to monetize Cryptocurrency subreddits and choking off other communities. As if these Crypto communities weren't home to some of the shadiest moderators, including pump-and-dumpers, already - Redditors have lost billions of dollars in these communities, sometimes directly as a result of these communities.

It's not a far stretch to say that subreddits like EarthPorn, Books, Videos, Music, and other well-established subreddits should probably never have been wholesale-removed from Reddit's user exploration and onboarding experiences. This seems, on its face, obviously stupid and wrong.

I don't know what came first - the cart or the horse. Rates rising from 0.25 to over 5.25% in the US are going to light a fire under any high-growth/cash-burn company like Reddit, and making securing additional financing, especially levered loans, an incredibly difficult task

Add to that, any existing debt will need to be refinanced at new, higher rates. While most of this is likely priced in, it seems to me that Reddit has hired far too many people without pro-social skills - people who can't 'read the room.'

Their solution seems to be to monetize these Crypto subreddits, while burning down everything that's built Reddit up. They see the users as cash cows - I suppose because they've already lost billions of dollars.

It's a bit surreal when I'm arguing with Reddit admins - and I'm the one who's on the side of A13Z and other investors, while they're demanding to drive this site into the ground as fast as is possible.

Hyperbolic language, I could be wrong, all of this could be false, this is just my opinion.

Edit: Here's a video we received of someone trying to join Reddit to find music or music discussion, specifically the r/Music community - and failing.

Random Note: Subreddits like r/TaylorSwift are thriving - they're 'Celebrity' subreddits, not 'Music.' They're doing great! Trending celebrity subreddits are unaffected, even if they are involved in books/videos/music/food or other categories. This likely means the issue is easy to fix. We'll see... Maybe we should all make Celebrity/Crypto our primary topics in large subs that have been abandoned.