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Reddit has never turned a profit in nearly 20 years, but filed to go public anyway

Reddit has never turned a profit in nearly 20 years, but filed to go public anyway::Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.

jimmydoreisalefty ,
@jimmydoreisalefty@lemmy.world avatar

Profit

Does it have shell companies that Reddit offloads its profit to...

Might be similar to twitter or news media, influence is worth more to its owners?

Data is valuable as well...

Top 10% own stock, so that can also be part of the stock games...

GissaMittJobb ,

Unlikely. It's in all likelihood just a bad business, like so many other VC-subsidised businesses that have come before them. Case in point: Uber, Airbnb, WeWork.

The whole game is to offer services at a loss for enough time to lock in customers, then raise the prices in the future.

TurtleJoe ,
@TurtleJoe@lemmy.world avatar

Reddit has been a private company for its entire existence. There really isn't a point in it making a profit, as long as the people running it are paying themselves.

tsonfeir , (edited )
@tsonfeir@lemm.ee avatar

Because the stock market is a scam and whoever is valuing these companies so high is clearly in on it. Any company that has no profit is should be worth nothing in an IPO.

Edit: strikethrough, to be more clearly an opinion.

AdmiralShat ,

If a business was actually losing money for 20 years straight then how does it continue to grow? Think about Amazon and how long it wasn't profitable despite being one of the largest businesses ever in recorded history.

It's a business scam that's a legal way of pay significantly less taxes than they normally would.

originalucifer ,
@originalucifer@moist.catsweat.com avatar

dont forget getting to gamble with other peoples forced retirement accounts! yay!

AdmiralShat ,

Haven't most places moved to 401ks for this reason? I'd never participate in a pension and I imagine the vast majority of those working in the tech industry are smart enough not to as well

I could be wrong I'm basing all this on assumptions about others intelligence

originalucifer ,
@originalucifer@moist.catsweat.com avatar

wouldnt it be cool if retirement didnt rely on the market, at all? in any capacity. like, if we werent forced to go with a 'lower risk' tier of the house of cards.

AdmiralShat ,

The value of money is based on the market, all aspects of finance are based on economies. Even just a straight up savings account gradually devalues

We fucked up a species when we traded communities for economies.

bassomitron ,

Pensions are amazing, why the hell would you not want one? 401ks are nice, too, and ideally you find a gig that does both. Yes, there are some companies that have fucked their employees' pensions over, but those are in the minority and doing so is illegal, so those companies tend to be doing other illegal shit as well (e.g. the infamous case of Enron).

AdmiralShat ,

A 401k is something, an account, I legally own. A pension is a promise.

nooneescapesthelaw ,

I dont want to be pinned down to one company, or because i may want to retire earlyz or because i want actual full 100% control of how my money is invested so that i know it's inline with my religious beliefs and morals

namingthingsiseasy ,

And yet, many (maybe even most) countries in Europe operate on a pension system for retirement. That would include tech workers in said countries as well.

But American companies (and Canadian too?) have mostly done away with them by now

SorteKanin ,
@SorteKanin@feddit.dk avatar

If a business was actually losing money for 20 years straight then how does it continue to grow?

It's because it keeps getting funded by venture capitalists, as far as I understand. Keeping it afloat because they believe it will eventually bring a return on that investment.

I feel like investments used to be a reasonable thing. Like some rich fella or a fund organization or something invested in a thing and then a little later (couple years at most I would say) it's profitable and can start paying back the investment (which was essentially a loan).

Now it's become more and more pyramid-scheme-esque. You start with a small funding round to get a bit of growth but you still grow faster than profits can keep up with. Then you get a slightly bigger funding round but you also grow slightly faster. Then you repeat this for 20 years and then you have Reddit's situation I suppose.

But it seems crazy. Why is there so much money in the world being spent for this potential return? I get it, investments do enable innovation and new businesses and all that. That's the supposed benefit of capitalism. But it's starting to feel ridiculous when it goes on for so long without ever producing a surplus of value.

ColeSloth ,

How much is it worth for the power to push an agenda onto 850,000,000 people?

tsonfeir ,
@tsonfeir@lemm.ee avatar

Subjective. To whom? That’s the big question. When valuing a company, logically you look at the books. If the books say they cannot survive without continuous investment, they’re not a good financial investment.

You cannot measure the value of Reddit having a lot of users who could, in theory, leave at any moment. It’s not something that can have a value. Therefore it’s made up.

Windex007 ,

Any company that has no profit is worth nothing in an IPO.

I envy people with the bravery to speak passionately about something they don't understand at all.

tsonfeir ,
@tsonfeir@lemm.ee avatar

I love that phrase. Edited to express that my statement was an opinion.

autotldr Bot ,

This is the best summary I could come up with:

Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.

The filing comes nearly three years after Reddit hired its first chief financial officer, and executives, including co-founder and CEO Steve Huffman, began publicly discussing the possibility of an IPO to further elevate the company’s profile.

Reddit, which has called itself the “front page of the internet,” is a social media veteran: the company started in 2005, the year that college roommates Huffman and Ohanian graduated from the University of Virginia.

In 2021, Reddit caused mass market upheaval when a community of day traders on the platform called WallStreetBets began buying up shares of GameStop in an effort to hurt hedge funds that bet against the stock.

Thursday’s filing offers the most detailed look yet at the state of Reddit’s business, which seeks to grow beyond the traditional ad-supported model upon which most social platforms continue to heavily rely.

And while Reddit said it expects its total addressable market in advertising to grow to $1.4 trillion by 2027, it also acknowledged in the filing’s risk factors disclosure that it has “a history of net losses and we may not be able to achieve or maintain profitability in the future.”

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