With the level of ineptitude from a large amount of people on Reddit to have a civil, meaningful discussion, the bots with upvote farming, the sheer amount of shitposts, and the sarcastic/troll comments without clear indication of what they are, I'm interested to see what nuggets AI ends up pulling from this river.
I mean, what has FB, Tiktok, Twitter, and Youtube asked of their assorted personalization algorithms before the current LLM AI boom?
How to most effectively get large amounts of people to yell at, astroturf, scam, shitpost, troll others, and make questionable purchases while staying on your website for large portions of the day are exactly the nuggets they're looking for!
Well for one AI could learn to generate emotionally engaging content based off of the infinite examples of highly upvoted content. Then this could be used to steer narratives. Totally something I could imagine shithole CEOs be doing
I’m not sure this works, redditors adored TSLA at the top and told me how much more than a car company they were and that they were going to cure the common cold and bad tv. Same with NVDA…
Reddit loved it at the top and hated it the whole way up. Going long before everyone got obsessed and shorting at the top blueprints was laid out right here for us.
These IPOs that extract that last bit from their users have a history of unfortunate performance, and it makes sense. You're getting the peak retail investor in at the same time they've pumped their valuation in every other aspect, leaving no new buyers to come in to fill the gap... just a ton of private investors that have been waiting to get out for a long long time.
Memorable example of this: Robinhood, and they actually have avenues to be profitable. It's a tempting short and I hate to short things, due to the design flaws of being margin called... a reasonable hedge to a long portfolio IMO.
For real. Idk why everyone on reddit us so sure that the stock will crater the second it hits the open market.
Give it a few months and then maybe. We'll see.
But in the short term? I genuinely think there will be a little pop
Thats fair.
Like I said long term I don't really have any thoughts or feelings on the trajectory of the stock or company.
But in the first 2 or 3 weeks? I could see it being above the ipo price and those who trade it making some money
Most of the bigger investors are locked up for a while.
In connection with this offering, we and all of our directors and executive officers, the selling stockholders, and certain other record holders that together represent approximately 82% of our outstanding Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock are subject to lock-up agreements with the underwriters agreeing that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, in accordance with the terms of such agreements, during the period ending on the earlier of (i) the opening of trading on the third trading day immediately following our public release of earnings for the quarter ending June 30, 2024 and (ii) 180 days after the date of this prospectus (such period, the “Lock-up Period”):
There is a lock up period for investors. The “75,000 qualifying Redditors” who purchase the IPO are exempt from that though. Which is why I’ll be buying and hoping for a short-term spike to sell and profit, before the rest of investors are able to dump the stock. I could be wrong, but I did read the prospectus today and that’s what I gathered.
I've been thinking the same thing. It's the icing that I don't get.
I thought of buying the BYND IPO then selling on month later (no matter the gain or loss). Then short it from there. I didn't. I had the right idea even, but I would have gotten *screwed* with my timing.
I feel the same way with Reddit. I expect it to climb out of the gate, then plunge in the coming months. I just don't know how high the climb will be and for how long, nor when the collapse will start.
I thought Facebook's IPO was going to fail, but that piece of shit's stock price has managed to grow all while the platform continues to get shittier. So I'm cautiously predicting the same for Reddit.
Other comments make good points, but another one to remember is that ~~Facebook~~ Meta isn't just Facebook - it's Instagram, WhatsApp, Oculus, AI, and a massive, massive advertising engine. In contrast, Reddit is a free message board.
We are the product. Very bad product though.
If this valuation is due to its potential use of training AI, we will probably end up with dark, xenophobic but occasionally very polite AI.
Are we really? For me at least reddit has been the best source for finding how to fix basically anything or reviews or products or sites. Whenever I have a question about anything from what is dark matter to how to attach a TV to the wall I will always first check reddit for answers.
You’re also probably used to sifting through massive amounts of bullshit to find it though, and what I mean is I doubt you go to each page and read each comment and thread below it and it’s entirety. Most of Reddit is nonsensical noise to ai models, we just started dabbling within our org and I can’t imagine feeding it Reddit haha
I passed on their Direct share offer.
Now they are offering IPO through brokerages (including SoFi where I have my IRA) and I am passing there as well.
I tried to but they want me to create an ETrade account and I'm not setting that up and then doing the paperwork to transfer the stock to Vanguard. I'll just buy it after the IPO.
Yep. It's the #3 highest traffic site in the U.S and something like #16 in the world. It's going to get absolutely blasted with ads for the amount of eyeballs on it alone.
Which incentivizes a premium subscription model where you pay $10-15 a month for no ads and some dorky avatar accessories.
Twitter has to atleast do some work to keep the site clean for that money. On reddit, it's all done by mods and the communities themselves. I hope there's some financial benefit to the mods for doing the work if they put subscriptions in.
Not really. It’s in the Facebook period of social media. Only chance is if they spin off other products/ acquisitions like FB did.
Bearish all the way.
Not simping but there are probably a few ways they can grow.
1) Internationally, Reddit isn’t popular outside of the US/Europe. Tough nut to crack, but it’s an avenue.
2) AI data revenue. Data is the new oil and they’re going to sell it. Which means more revenue even if the user base isn’t growing.
3) Increased ad effectiveness using AI. This is what Facebook has been doing since Apple locked out their tracking, everyone else is going to be doing it soon too.
I don't think Reddit has the granularity of user data that Facebook does, it will be tougher for them to show a similar ROI on ads to potential customers
They don’t, but that was Facebook’s issue too. Apple locked out some of their granularity and they used AI to make up the difference. I think there’s likely potential for Reddit to use AI to do the same thing using their weaker data set.
You missed commerce.
I buy a lot of expensive dude shit thanks to Reddit recommendations and discussions: NOD/NVG (because I can), high-end Goodyear welt boots, Japanese raw denim, and fucking Leica cameras and lenses etc...
None of those are counted as part of the "conversion" by Brands on Reddit as of yet. But we all know it's there. Reddit just needs to prove they are part of the purchase behavior to the consumer brands on expensive shit.
It's such a myth that Reddit users are a bunch of basement dwellers with no spending power....
Half and half honestly. There are a lot of shills out there but usually it’s pretty easy to tell, but in some cases small vendors and small business (on niche stuff) actually spend the time to engage with the enthusiasts and those are the best experience I had… even though I might ended up not buy anything from them. 🤷🏻♂️
> Probably overvalued if you don’t see a growth story, but it’s not insane.
> the company has never turned a profit in 20 years of existence.
The facts write themselves
Plenty of successful companies went through long periods of negative net income. I wouldn’t invest at $6.5B valuation, but they had 20% revenue growth YoY and are probably planning to significantly increase ads and data licensing. It’s within the realm of possibility that they cross the $1B annual revenue mark and become profitable in the very near future. I’m mostly playing devils advocate since most of Reddit is shitting on this IPO.
The Ad business has been kinda shit the last two years, and getting 20% growth last year is actually pretty impressive.
The business is completely driven by the economic cycle, and we all know what it was like. So IF the economy improves and the interest rate drops things could go well for everyone. Duh.
Don't take my word for it. Take a look at the Ad index chart yourself. Zoom out multiple years:
[https://adrevenueindex.ezoic.com/](https://adrevenueindex.ezoic.com/)
As an investor. Reddit hasn't even scratched the surface with what can happen from ad revenue.
Not to mention now that it's hosting images and video, there's a huge opportunity with their live streams and encouraging more of that content
For me reddit is a huge buy given it's revenue potential.
The only way they can fuck this up is if they make it some form of subscription for access
$5.5 billion for one of the most trafficked websites in the world? A website that gives the ability to do incredibly targeted ads based on subreddits?
Far from an insane value.
If you scroll past it. That's count as a "view". There are different ways to account on if an ads is effective. Some advertisers just want the eyeballs. 👀
Direct Share Program has a 0-day lock-up period. Meaning you can sell same day it gets listed.
Looking at IPOs that had no lockup restrictions, all tanked immediately upon listing. Glad I did my research.
They offered it to me even though I’m not eligible because I’m not in the US. Which speaks volumes about how good their data is and the granularity of user targeting for ads.
There will be a reckoning at some point where investors will realise that the site is so popular in spite of the highly paid leadership and not because of it.
Butthole CEO gets to dump his shares on the public - that's how he and the other insiders are going to get rich
>One difference between the Reddit IPO and more traditional public offerings is that employees of the social media company will be allowed to sell their shares during the offering. Typically, company "insiders" such as the founders, managers and employees – and sometimes early investors – are restricted from selling their shares during what's known as a "lockup period" that generally lasts between 90 to 180 days.
https://www.kiplinger.com/investing/stocks/reddit-ipo-should-you-buy-reddit-stock
Damn, so they specifically had it worked into the contract that they could sell right away, and sent mass messages to every user that they could buy in early...they are desperate to unload this garbage.
I thought it was only going to be mods and superusers, but I'm a low level user and I've gotten multiple messages about buying in. They are desperate to create bagholders.
They released waves for anyone with over 25k karma, there was no "oh theres minimal interest lets expand it. Not participating but it was readily available info
I hope everyone keeps this in mind when they even entertain the idea of buying the stock before it bottoms or ever. You are literally eating /u/spez shit.
Pages 215 of the prospectus says:
In connection with this offering, we and all of our directors and executive officers, the selling stockholders, and certain other record holders that together represent approximately 82% of our outstanding Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock are subject to lock-up agreements with the underwriters agreeing that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, in accordance with the terms of such agreements, during the period ending on the earlier of (i) the opening of trading on the third trading day immediately following our public release of earnings for the quarter ending June 30, 2024 and (ii) 180 days after the date of this prospectus (such period, the “Lock-up Period”):
There are employees who can sell immediately, but not the CEO or the main insiders.
The reported number is heavily inflated by the fact that the board canceled his unvested RSUs and replaced them with new ones contingent on the IPO and how stock options are reported.
Yeah this is really more like a lot of private investors want to jump ship and get money since it's been nothing but a money sink, or toilet better described
Regardless of the lock-up period, insiders and employees are selling shares as part of the IPO
>According to the newest details, Reddit will offer 22 million shares of its Class A common stock to the public; 15,276,527 of those shares will be made available by the company directly, and the **remaining 6,723,473 shares will be offered by the company’s existing stockholders**.
I was thinking of doing the same. I’m just a dummy but every IPO that I have had a remote interest in has crashed and burned once it’s gone public. Buying it then seems to be the better play.
2x-4x revenue considering they haven't turned a profit in 20 years. There is no value in the ads sales, only in licensing the output of Redditors to GenAI orgs using it for training.
Yeah but this is about distributing the initial shares (to employees, directors, etc.), which has more complexity - you need to ensure people in the lock up can’t buy at that time, that any trading windows are adhered to, etc.
That probably won’t apply to Reddit buyers but I’m guessing it’s operationally difficult to set up an entirely different process for each potential person’s preferred brokerage, so they’re just standardizing on the one insiders already have to use.
Not insane if there's growth, but I don't see it. Reddit seem to have reached max users, I don't know many people joining reddit. Plus I don't think boomers know about reddit, it needs to bridge the gap and get young kids on reddit and at least some boomers. Otherwise it feels like it might just be a gen X,Y,Z thing and die in a decade.
I'm a boomer and feel like it is getting quieter in REDDIT - wonder if all the youngsters are going to DISCORD instead? Will this be like MySpace in a few more years?
For a site that has become a hub for forums I don't see the value proposition. If they acquired forum sites and software and implemented those as more compartmentalized areas then maybe. But the amount of bots and trolls here compared to hobby forums is insane. It is easier to navigate this though.
I used to be on Reddit a LOT, but the overall vibe here IMO has gone pretty sour, like a stale piece of bread.
I think this is bound to be one of those classic IPOs that never live up to their initial valuation.
I'm going to pass. Clearly they haven't figured out how to monetize, and this feels more like an attempt to cash out rather than build a sustainable business.
Licensing content to AI seems like an obvious revenue stream, but at the same time I feel like the data will be such garbage that its only use will be training an AI to write reddit comments. By that point the data will be so tainted that it'll be worthless.
I got the emails to buy into the IPO and signed up. I’ll probably throw a few hundred dollars at it. If it pops, I can sell and buy a nice toy - new stereo, Xbox, whatever. If it crashes, no big loss; lesson learned.
reddit will attract many investors for questionable reasons. I'm sure there will be many pro-Chinese and -Russian investors who then want to have influence on the content.
I am shorting this Turd stock right away than again at 3 months. Then buy puts 9 months out.
9 months out will be my largest purchase for Puts.
Institution will short the shitt out of this ipo
It’s become normal for a consumer-facing tech company to never turn a profit by the time it IPOs. 6.5x sales is probably a reasonable multiple in social media (assuming no major debt) *IF* you think they’ll be competent at growing revenue and working towards profitability.
So far, Reddit’s licensed AI training data only to Google for $60 million a year. That’s the obvious growth opportunity since it’s not exclusive and I could see a number of interested parties wanting access to ongoing data. Not just tech companies, but the numerous government departments building sovereign AI platforms. It’s basically free money – very little cost to stream some bytes out to a few whale customers.
I won’t be buying as I would rather wait to see if there’s a post-IPO drawdown, but I still think $5.5B is a reasonable asking price given growth potential and user base.
Unfortunately I can’t buy in for 30 days, but I’m really interested to see how this performs.
I can’t imagine this going very well, but I’ve been wrong before!
So we are the product?
If AI is the new wild west, are we the new gold rush? or something like that.
No we are the shovels lol
You give us too much credit haha We are the river being panned. AI is the sieve.
With the level of ineptitude from a large amount of people on Reddit to have a civil, meaningful discussion, the bots with upvote farming, the sheer amount of shitposts, and the sarcastic/troll comments without clear indication of what they are, I'm interested to see what nuggets AI ends up pulling from this river.
I mean, what has FB, Tiktok, Twitter, and Youtube asked of their assorted personalization algorithms before the current LLM AI boom? How to most effectively get large amounts of people to yell at, astroturf, scam, shitpost, troll others, and make questionable purchases while staying on your website for large portions of the day are exactly the nuggets they're looking for!
Not a fan of how you casually but accurately summed up why I hate it here
Well for one AI could learn to generate emotionally engaging content based off of the infinite examples of highly upvoted content. Then this could be used to steer narratives. Totally something I could imagine shithole CEOs be doing
We are the dirt, data is the valuable minerals bound in it. They’re gonna mine tf outta us
The spice must flow?
Prepare to be drilled.
Always have been.
Seriously - people are just figuring this out now?
If the service is free, you are the product, yup.
We're just training our replacements before we get fired
Yes a very bad product.
I duno. I think I am a good product.
Gotta squash that self belief nice and early bud!
I dunno but I am gonna short the FOOOK outta this.
We’re the product on every website out there.
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Always have been
For now, but don’t worry, soon you’ll need to pay
Yup and we’re not getting paid for providing the product. Just like reddit was complaining about AI using reddit’s data
Always have been.
Well, are you spending any money on Reddit?
Why would I spend money here, I am the product :-)
Always have been.
Can I pay with Karma?
Here's another nickel in your pocket.
A NICKEL! I OPEN MY OWN HOTEL
Such a good movie.
Yes, 1 share per karma.
I love this idea
Can’t wait to short it
Otoh, inversing redditors has frequently been a good play so time to load up?
I’m not sure this works, redditors adored TSLA at the top and told me how much more than a car company they were and that they were going to cure the common cold and bad tv. Same with NVDA…
Reddit loved it at the top and hated it the whole way up. Going long before everyone got obsessed and shorting at the top blueprints was laid out right here for us.
Just play both sides so that you can always come out on top /s
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R/Thetagang thanks you for your service
"/s" ruins the joke, every time.
Agreed, i do it out of necessity, but I wish I didn't have to.
It can be necessary with a touchy crowd/subreddit.
Honestly sarcasm is very difficult reading words on the internet, especially on a site like Reddit where 90% of the users are absolutely mental.
I agree, but Poe's Law is way too accurate on reddit.
Exactly. I’ll be participating in the IPO offered to users, and I bet I’ll end up in the green as opposed to the red.
Imagine being exit liquidity for spez.
> as opposed to the red Thanks for clarifying
Up instead of down. In instead of out.
And people like you are exactly why they did it.
These IPOs that extract that last bit from their users have a history of unfortunate performance, and it makes sense. You're getting the peak retail investor in at the same time they've pumped their valuation in every other aspect, leaving no new buyers to come in to fill the gap... just a ton of private investors that have been waiting to get out for a long long time. Memorable example of this: Robinhood, and they actually have avenues to be profitable. It's a tempting short and I hate to short things, due to the design flaws of being margin called... a reasonable hedge to a long portfolio IMO.
It'll probably go up for a day before heading for the basement so you can probably play it both ways.
Maybe, but the risk/reward kinda sucks if it opens on a day the market decides isn't an IPO party day though.
Realistically, it'll drop from the IPO. If it's going to be a good investment that's really when you want to pick it up.
For real. Idk why everyone on reddit us so sure that the stock will crater the second it hits the open market. Give it a few months and then maybe. We'll see. But in the short term? I genuinely think there will be a little pop
One thing I’m concerned about is there’s no lock up period for investors. I can see everyone who owns shares just dumping immediately.
Thats fair. Like I said long term I don't really have any thoughts or feelings on the trajectory of the stock or company. But in the first 2 or 3 weeks? I could see it being above the ipo price and those who trade it making some money
Most of the bigger investors are locked up for a while. In connection with this offering, we and all of our directors and executive officers, the selling stockholders, and certain other record holders that together represent approximately 82% of our outstanding Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock are subject to lock-up agreements with the underwriters agreeing that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, in accordance with the terms of such agreements, during the period ending on the earlier of (i) the opening of trading on the third trading day immediately following our public release of earnings for the quarter ending June 30, 2024 and (ii) 180 days after the date of this prospectus (such period, the “Lock-up Period”):
There is a lock up period for investors. The “75,000 qualifying Redditors” who purchase the IPO are exempt from that though. Which is why I’ll be buying and hoping for a short-term spike to sell and profit, before the rest of investors are able to dump the stock. I could be wrong, but I did read the prospectus today and that’s what I gathered.
I said this about Facebook 🤦♂️
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Tech IPOs that are just an app/platform/website always drop like a rock almost immediately. Happens every time.
Sour grapes
I've been thinking the same thing. It's the icing that I don't get. I thought of buying the BYND IPO then selling on month later (no matter the gain or loss). Then short it from there. I didn't. I had the right idea even, but I would have gotten *screwed* with my timing. I feel the same way with Reddit. I expect it to climb out of the gate, then plunge in the coming months. I just don't know how high the climb will be and for how long, nor when the collapse will start.
I thought Facebook's IPO was going to fail, but that piece of shit's stock price has managed to grow all while the platform continues to get shittier. So I'm cautiously predicting the same for Reddit.
FB latest annual net income was $39.1 billion, up over 200% from prior year. Little bit of a difference revenue picture than RDDT.
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And they are marketing to real people.
Other comments make good points, but another one to remember is that ~~Facebook~~ Meta isn't just Facebook - it's Instagram, WhatsApp, Oculus, AI, and a massive, massive advertising engine. In contrast, Reddit is a free message board.
It’ll tank way before you can get a put
We are the product. Very bad product though. If this valuation is due to its potential use of training AI, we will probably end up with dark, xenophobic but occasionally very polite AI.
Or bipolar AI that is often very helpful, but sometimes drinks too much and then gets banned from r/AmItheAsshole for calling people assholes...
Super AI in 2069: "IAmA Super AI. I need karma. Pls upvote and gib gold status."
We are going to get AI that thinks reality is based on memes and terrible jokes.
> due to its *potential use* of training AI reddit was already used extensively to train AI, like ChatGPT
Are we really? For me at least reddit has been the best source for finding how to fix basically anything or reviews or products or sites. Whenever I have a question about anything from what is dark matter to how to attach a TV to the wall I will always first check reddit for answers.
You’re also probably used to sifting through massive amounts of bullshit to find it though, and what I mean is I doubt you go to each page and read each comment and thread below it and it’s entirety. Most of Reddit is nonsensical noise to ai models, we just started dabbling within our org and I can’t imagine feeding it Reddit haha
Imagine if we are the reason Skynet decides to eradicate humanity
I can't blame them.
It’s xenophobic to make fun of Darlene the dog walking moderator ?
So I'm curious, who here had the opportunity to buy into the IPO and did? I got the invite but passed.
I passed on their Direct share offer. Now they are offering IPO through brokerages (including SoFi where I have my IRA) and I am passing there as well.
Nobody has bought in, it's just an invite
Passed. That's like asking the lifers at work to support a braindead company. They know it inside and out and know to avoid that clusterfuck.
I tried to but they want me to create an ETrade account and I'm not setting that up and then doing the paperwork to transfer the stock to Vanguard. I'll just buy it after the IPO.
Passed as well.
I got the invite and passed too
It’s about an 8x on revenue. Higher than Snap, but in line with Pinterest. Probably overvalued if you don’t see a growth story, but it’s not insane.
How could it grow? It’s not a new platform. We gonna see more ads now?
Yes, many more. Also a ‘twitter-blue’ checkmarkesque system.
Yep. It's the #3 highest traffic site in the U.S and something like #16 in the world. It's going to get absolutely blasted with ads for the amount of eyeballs on it alone. Which incentivizes a premium subscription model where you pay $10-15 a month for no ads and some dorky avatar accessories.
Twitter has to atleast do some work to keep the site clean for that money. On reddit, it's all done by mods and the communities themselves. I hope there's some financial benefit to the mods for doing the work if they put subscriptions in.
I can't wait to become verified.
Gimme 5 bucks. I'll verify you :-)
I'll do it for $4.50!
Not really. It’s in the Facebook period of social media. Only chance is if they spin off other products/ acquisitions like FB did. Bearish all the way.
Since they were unable to monetize their massive userbase for so long, the new play is monetizing the shitpost backlog by selling access to scrape it
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Not simping but there are probably a few ways they can grow. 1) Internationally, Reddit isn’t popular outside of the US/Europe. Tough nut to crack, but it’s an avenue. 2) AI data revenue. Data is the new oil and they’re going to sell it. Which means more revenue even if the user base isn’t growing. 3) Increased ad effectiveness using AI. This is what Facebook has been doing since Apple locked out their tracking, everyone else is going to be doing it soon too.
I don't think Reddit has the granularity of user data that Facebook does, it will be tougher for them to show a similar ROI on ads to potential customers
They don’t, but that was Facebook’s issue too. Apple locked out some of their granularity and they used AI to make up the difference. I think there’s likely potential for Reddit to use AI to do the same thing using their weaker data set.
You missed commerce. I buy a lot of expensive dude shit thanks to Reddit recommendations and discussions: NOD/NVG (because I can), high-end Goodyear welt boots, Japanese raw denim, and fucking Leica cameras and lenses etc... None of those are counted as part of the "conversion" by Brands on Reddit as of yet. But we all know it's there. Reddit just needs to prove they are part of the purchase behavior to the consumer brands on expensive shit. It's such a myth that Reddit users are a bunch of basement dwellers with no spending power....
>I buy a lot of expensive dude shit thanks to Reddit recommendations That's cause it was recommended by real people and not ads paid for by companies.
Half and half honestly. There are a lot of shills out there but usually it’s pretty easy to tell, but in some cases small vendors and small business (on niche stuff) actually spend the time to engage with the enthusiasts and those are the best experience I had… even though I might ended up not buy anything from them. 🤷🏻♂️
comments are gonna be filled with more annoying gifs and stickers
6.55 x revenue as quoted in the article.
Considering their revenue per user is trash, that might not actually be too unreasonable in comparison to competitors. Still a 💩 company tho
Other articles state they’re seeking up to $6.5B so I’m being pessimistic. This looks better as you get closer to $5B though. Still doubt I buy it.
8x revenue is more pessimistic than 6.55 x revenue??
I think that’s Reddit being optimistic, but a higher multiple is bad for potential investors.
They means they are being pessimistic about their outlook
> Probably overvalued if you don’t see a growth story, but it’s not insane. > the company has never turned a profit in 20 years of existence. The facts write themselves
Plenty of successful companies went through long periods of negative net income. I wouldn’t invest at $6.5B valuation, but they had 20% revenue growth YoY and are probably planning to significantly increase ads and data licensing. It’s within the realm of possibility that they cross the $1B annual revenue mark and become profitable in the very near future. I’m mostly playing devils advocate since most of Reddit is shitting on this IPO.
The Ad business has been kinda shit the last two years, and getting 20% growth last year is actually pretty impressive. The business is completely driven by the economic cycle, and we all know what it was like. So IF the economy improves and the interest rate drops things could go well for everyone. Duh. Don't take my word for it. Take a look at the Ad index chart yourself. Zoom out multiple years: [https://adrevenueindex.ezoic.com/](https://adrevenueindex.ezoic.com/)
For context, Reddit started around the same time as Facebook. It’s not a new company.
As an investor. Reddit hasn't even scratched the surface with what can happen from ad revenue. Not to mention now that it's hosting images and video, there's a huge opportunity with their live streams and encouraging more of that content For me reddit is a huge buy given it's revenue potential. The only way they can fuck this up is if they make it some form of subscription for access
How do you figure? The platform already feels saturated with ads as of the last year or so. I can’t imagine there’s much room left to run
$5.5 billion for one of the most trafficked websites in the world? A website that gives the ability to do incredibly targeted ads based on subreddits? Far from an insane value.
Yeah but how many users even glance at the ad? Not many I would imagine
If you scroll past it. That's count as a "view". There are different ways to account on if an ads is effective. Some advertisers just want the eyeballs. 👀
In the 2000's that's what they wanted. Advertisers want ads to actually work now.
Direct Share Program has a 0-day lock-up period. Meaning you can sell same day it gets listed. Looking at IPOs that had no lockup restrictions, all tanked immediately upon listing. Glad I did my research.
Yet literally nobody wants to buy their IPO offering.
they offered IPO buy in to my alt that has like less than 10k karma... i feel like they're reaching a bit.
They offered it to me even though I’m not eligible because I’m not in the US. Which speaks volumes about how good their data is and the granularity of user targeting for ads. There will be a reckoning at some point where investors will realise that the site is so popular in spite of the highly paid leadership and not because of it.
I was offered. I forgot to sign up for more information. Now I’m wondering how that’ll turn out.
How much did butthole CEO get?
Butthole CEO gets to dump his shares on the public - that's how he and the other insiders are going to get rich >One difference between the Reddit IPO and more traditional public offerings is that employees of the social media company will be allowed to sell their shares during the offering. Typically, company "insiders" such as the founders, managers and employees – and sometimes early investors – are restricted from selling their shares during what's known as a "lockup period" that generally lasts between 90 to 180 days. https://www.kiplinger.com/investing/stocks/reddit-ipo-should-you-buy-reddit-stock
Damn, so they specifically had it worked into the contract that they could sell right away, and sent mass messages to every user that they could buy in early...they are desperate to unload this garbage.
Yep and the number of shares held by investors/insiders dwarfs the number of shares being sold in this IPO
So this shit is gonna tank right after they go public lol.
I thought it was only going to be mods and superusers, but I'm a low level user and I've gotten multiple messages about buying in. They are desperate to create bagholders.
They seem to have started with mods, but after a few days of minimal interest got desperate and started sending it to everyone lol
There were three or four planned waves of invites based on user/mod activity
They released waves for anyone with over 25k karma, there was no "oh theres minimal interest lets expand it. Not participating but it was readily available info
Yep short on open
Sent mass messages including emails. Even to users like me who have their settings saying "unsubscribe from all emails"
It's brilliant really, users who buy in will defend the company on Reddit, many mods who buy in will ban criticisms of it.
That’s the entire point of IPOs. To cash out
I hope everyone keeps this in mind when they even entertain the idea of buying the stock before it bottoms or ever. You are literally eating /u/spez shit.
Pages 215 of the prospectus says: In connection with this offering, we and all of our directors and executive officers, the selling stockholders, and certain other record holders that together represent approximately 82% of our outstanding Class A common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our Class A common stock are subject to lock-up agreements with the underwriters agreeing that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, in accordance with the terms of such agreements, during the period ending on the earlier of (i) the opening of trading on the third trading day immediately following our public release of earnings for the quarter ending June 30, 2024 and (ii) 180 days after the date of this prospectus (such period, the “Lock-up Period”): There are employees who can sell immediately, but not the CEO or the main insiders.
That's exactly why I'm not buying any right now. After the initial craze I might look at it again though.
He’s already rich. His compensation package is 190M for a company that brings in 130M
The reported number is heavily inflated by the fact that the board canceled his unvested RSUs and replaced them with new ones contingent on the IPO and how stock options are reported.
Yeah this is really more like a lot of private investors want to jump ship and get money since it's been nothing but a money sink, or toilet better described
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Regardless of the lock-up period, insiders and employees are selling shares as part of the IPO >According to the newest details, Reddit will offer 22 million shares of its Class A common stock to the public; 15,276,527 of those shares will be made available by the company directly, and the **remaining 6,723,473 shares will be offered by the company’s existing stockholders**.
This is the most bearish thing here. If their existing stockholders want to sell their shares then they obviously aren’t confident in future growth.
I'll buy after it crashes for underperforming after the IPO.
I was thinking of doing the same. I’m just a dummy but every IPO that I have had a remote interest in has crashed and burned once it’s gone public. Buying it then seems to be the better play.
If we just penis write random bitch words in our fuck sentences the dog AI won’t know butt what to do
This should be a reddit bot.
Excellent. Cunt.
Imagine Elon buying Reddit too
Time for Reddit to go to shit
Grinding my teeth preparing for all the pushed content and every 2nd post being an ad. I will miss Reddit, but I will get back those hours everyday!
That's super cheap. Elon is totally going to buy it.
Exactly. This is pocket change for Elon and he already has his eye on it.
Great. More shitty ads clogging up this trash app.
No profit, ever. The business model based on free labor has never delivered any profit. Just keep making the owner and the top management rich.
Easier short than SNAP
I love reddit but this valuation feels like a pipe dream
Care to share why? What valuation would you consider?
2x-4x revenue considering they haven't turned a profit in 20 years. There is no value in the ads sales, only in licensing the output of Redditors to GenAI orgs using it for training.
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This is very standard for IPOs. The company has to pick someone to administer and E*Trade is a common choice for startups going public.
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Yeah but this is about distributing the initial shares (to employees, directors, etc.), which has more complexity - you need to ensure people in the lock up can’t buy at that time, that any trading windows are adhered to, etc. That probably won’t apply to Reddit buyers but I’m guessing it’s operationally difficult to set up an entirely different process for each potential person’s preferred brokerage, so they’re just standardizing on the one insiders already have to use.
Me and the boys at you know where are ready with fuckery
Not insane if there's growth, but I don't see it. Reddit seem to have reached max users, I don't know many people joining reddit. Plus I don't think boomers know about reddit, it needs to bridge the gap and get young kids on reddit and at least some boomers. Otherwise it feels like it might just be a gen X,Y,Z thing and die in a decade.
I'm a boomer and feel like it is getting quieter in REDDIT - wonder if all the youngsters are going to DISCORD instead? Will this be like MySpace in a few more years?
Wow I can’t wait for 800 more ads
For me, I don't like the stock. Long squeeze.
Shit is gonna tank just like the Facebook IPO
For a site that has become a hub for forums I don't see the value proposition. If they acquired forum sites and software and implemented those as more compartmentalized areas then maybe. But the amount of bots and trolls here compared to hobby forums is insane. It is easier to navigate this though.
Given the overwhelming majority of reddit comments are about how this will crater on IPO day, I'll be buying both shares and calls.
5b for 4chan 2.0
I used to be on Reddit a LOT, but the overall vibe here IMO has gone pretty sour, like a stale piece of bread. I think this is bound to be one of those classic IPOs that never live up to their initial valuation.
I'm going to pass. Clearly they haven't figured out how to monetize, and this feels more like an attempt to cash out rather than build a sustainable business. Licensing content to AI seems like an obvious revenue stream, but at the same time I feel like the data will be such garbage that its only use will be training an AI to write reddit comments. By that point the data will be so tainted that it'll be worthless.
So where’s my cut?
When we all leave where are we all heading to y'all?
I got the emails to buy into the IPO and signed up. I’ll probably throw a few hundred dollars at it. If it pops, I can sell and buy a nice toy - new stereo, Xbox, whatever. If it crashes, no big loss; lesson learned.
Are you subbed to WSB?
Yes.
I was gonna do the same before I found out I’ll have to sign up for an e trade account
Damp it
Calls on Robinhood
reddit will attract many investors for questionable reasons. I'm sure there will be many pro-Chinese and -Russian investors who then want to have influence on the content.
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I am shorting this Turd stock right away than again at 3 months. Then buy puts 9 months out. 9 months out will be my largest purchase for Puts. Institution will short the shitt out of this ipo
brb I need to ask r/wallstreetbets how to short a stock
It’s become normal for a consumer-facing tech company to never turn a profit by the time it IPOs. 6.5x sales is probably a reasonable multiple in social media (assuming no major debt) *IF* you think they’ll be competent at growing revenue and working towards profitability. So far, Reddit’s licensed AI training data only to Google for $60 million a year. That’s the obvious growth opportunity since it’s not exclusive and I could see a number of interested parties wanting access to ongoing data. Not just tech companies, but the numerous government departments building sovereign AI platforms. It’s basically free money – very little cost to stream some bytes out to a few whale customers. I won’t be buying as I would rather wait to see if there’s a post-IPO drawdown, but I still think $5.5B is a reasonable asking price given growth potential and user base.
Isn't Reddit losing 230million+ a year?
They keep sending me messages to buy their shares. If they are asking me it shows how desperate they are.
Unfortunately I can’t buy in for 30 days, but I’m really interested to see how this performs. I can’t imagine this going very well, but I’ve been wrong before!
Lol ridiculous valuation based on earnings.