Fidelity estimates Reddit’s holdings are at $15.4 million, which is down over 7% from the fund’s estimates of $16.6 million from this past April.
This explains the spez iron boot. The business is in a lot of trouble and he’s concerned about his job and the jobs of everyone around him. Ironically, the iron boot is making the whole situation worse. Because spez isn’t very good at strategy. Often, bankers are appeased when a business takes bold decisions to cut things. But in this case, it has only revealed what a fragile business Reddit has, from a Wall Street perspective, anyway. Associating himself with Elon Musk is absolutely suicide after that fool got taken for billions in the Twitter sale and has only damaged it further since then. But like I said, not very strategic there Mr spez…
I anxiously await the day where a news headline mentions Reddit’s IPO be postponed, delayed, or canceled due to a loss of investor confidence.
The reality is that unless you have immense, immense scale (i.e., Facebook, Instagram, YouTube, LinkedIn), making money off social media is impossible. Twitter barely made any money before Elon Musk took it over, and it’s making less now.
Reddit is pseudo-anonymous too and is harder to monetize, because high ad rates come from being able to identify your users.
Where do you get the idea reddit is not as big as Instagram? It has just as much traffic as wikipedia and Amazon in the U.S.
For those who didn’t read the article, important note.
The valuation decrease was as of May 31.
It wasn’t even after the Reddit apocalypse! What is going to happen next?
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I think that’s a fair take that’s likely to happen. It really depends now on what Reddit does to try to normalize things or blow things up more. I think if they try to just rebuild relationships with their new group of users, they may survive.
But they also seem equally as likely to find a new way to screw themselves over…
They still haven’t replaced >90% of the moderators… it will take months, probably longer to feel the full effects. People will test it, and will get creative. There is a decent chance if they aren’t actively working on a sophisticated plan for thay, the website turns into an alt-right cess pool with CP that slips through the cracks.
I remember reading that reddit went on a hiring spree and they like multiplied their workforce during the pandemic. I heard some speculation that this API change was about that, because they now have to make ends meet somehow or at least convince the investors that they are doing something. They invested and expected further growth and the pandemic tech boom didn’t last forever. One miscalculation leads to another.
That’s… not how valuations work. They’re using the amounts of cash raised, instead of adjusting those by the number of shares sold.
Fascinating. Should this be legit, this is solid proof for the protest having a tangible financial impact, right?
Nah. Doesn’t even account for the protest.
FTA:
this most recent valuation only accounts for the worth of the company’s holdings up to May 31.
They are PROPER fucked for Q3.
The IT tech industry isn’t doing great currently. Everything was fine as long as there were a practically infinite amount of money going around, but lately investors have been increasingly demanding signs of profitability over “limitless” expansion and growth.
That’s why a lot of companies have been doing these seemingly drastic changes lately. It may absolutely result in long term damages, but that is not their main concern at the moment. In some cases this is also somewhat a moment for these companies to show their cards and prove that they actually deserve the evaluation that they been given. I suspect that there will be quite a lot of agitated people in the coming months and years.
TechCrunch notes that the majority of Reddit’s turmoil in holdings occurred last year and this most recent valuation only accounts for the worth of the company’s holdings up to May 31.
That’s before the protest was even started, I would like to know how the value is after (that is now).
Would be interesting to see if the usage has dropped now that all the third party apps are going offline. Apollo and Rif had millions of users didn’t it?
Oh no! Anyway…
LOL eat shit reddit.
and once again, not a single word about the rise of alternatives that will likely hurt reddit much more deeply longer term than the initial, but vitally important, protest.
at this point, not including analysis of the alternatives in any reddit reporting is journalistic malfeasance (or intentional, malicious debate scoping). smh.
I’m sorry for people losing money because they believed Spaz’s “This will blow over.” Not sorry to see Reddit tanking.
I don’t know, if you believe someone who thinks Elon Musk did a great job with Twitter maybe you deserve to lose money
The only people losing money here are corporate private investors. I hope they lose every fucking cent.
I couldn’t care less about corporate investors. They deserve what they’re getting. But far too many ordinary people have been forced to put their retirement funds in the stock market (via 401(k) accounts instead of retirement plans), and I hope they’re safe.
Reddit hasn’t had their IPO yet. The only way that regular people are invested in it are by being invested in equity firms that own part of Reddit today. As best I can tell, the only one such company that (a) is invested in reddit, and (b) is public is Tencent.
So, for now, people are safe. It’s investment managers at private businesses that might get in trouble.
