Pretty simple to imagine that being worth far more than $1 billion. Their user growth recently has been astounding.
Also I suspect the site is increasingly populated with bots, not real users. I'd actually imagine the site is less popular this year in terms of real users than it was a year ago, although I have no way to know that and could be wrong. I'd need to see hard evidence to believe it hasn't had a rapidly growing bot population though.
Companies are valued based on discounted future cash flow. In other words, investors are betting that at some point in time Reddit will generate billions, even when adjusted for a discount for time. That's not crazy at all to me to see that happening.
Since almost all attempts to really monetize Reddit in the past have failed because of massive backlash from the users I wonder what the plan is. There has to be some kind of major change to either Reddit or to the audience to warrant the valuation.
Exactly this. Reddit has been around long enough that I don't foresee any experimentation that could yield this type of commercial turnaround.