Ask HN: What Happened to the Reddit IPO?
It was all over the place rumor-wise, and now there's radio silence.
There's a couple reasons why it's so bad. Firstly, everyone's expecting a recession, so advertising budgets are getting cut and that's going to tank Reddit's revenue stream (which is already weak) and secondly, a high interest rate environment means that all that future growth has to be discounted back to a much lower net present value. It's also just in a bad place narratively, none of the small scale social media sites are doing well revenue wise, and Tiktok is eating their lunches anyway.
Could someone explain this to me like I'm a 5 year old (who understands what a discount rate and present value are, but not why that collection of words makes things harder for reddit)?
If interest rates are zero, that's a good deal. If rates are 25%, that $1 will almost get there on its own in a Treasury. A good deal in a low-rate environment is a bad one when rates, the price of money, are high.
I'm still confused. I think of inflation as a thing that devalues a present day $1. But as it applies to companies with revenue it seems like a rising tide that would lift all boats, and something that kind of divides out of the analysis of the future revenue stream of a company.
e.g. If Reddit's daily revenue is $x and inflation is 10%, then its daily revenue in a year is (approximately, caveats about their ability to raise prices, etc.) $1.1x. So Reddit can say "give us a dollar today and we'll give you $10 multiplied by ten years of 10% inflation in ten years". Is that mental model wrong?
I'm also confused why this problem particularly applies to Reddit, which seemed to the the implication of the comment I originally responded to. Is that just because Reddit makes a loss, and this challenge applies to all such companies?
x / ((1+i)^n)
Discount rates are affected by interest rates, because interest rates represent what else you could do with your capital (you can always invest in a Treasury instead of a tech stock).
So if i goes up, x goes down.
TL;DR the higher returns from US bonds make other investments comparably less attractive because you can get better yields from the USD bonds.
I see them:
* Purposely crippling the web experience on desktop or mobile web
* Implementing a SPA badly. Clicking on some posts loads entirely different posts. Comments don't work sometimes.
* Purposely crippling the logged out experience
Reddit being a home for racists like this would probably generate a ton of scrutiny if they go public.
[1] https://www.nytimes.com/2019/10/08/us/reddit-race-black-peop...
I wonder if they'll be gone if they IPO.
one of the more painful experiences on reddit is spending 30 minutes writing up a post for a subreddit only to hit submit then get your content immediately deleted by a moderation bot ran by the sub's mods for breaking some rule you didn't realize existed or for having previously posted to some other subreddit that the mods disapprove of, even if you were posting a critical comment or disavowing the beliefs in that other subreddit.
Reddit is a platform for communities. Some communities, across all spectrums of topics, find reasons to create a somewhat exclusive environment. They are not required to make space for all views, and that lack of forced-openness is not the same as censorship.
/r/conservative does the exact same thing, why the handwringing about that sub in particular?
I feel it's important to note that a similar restriction focused on any other race, even other minority races, would probably be banned within a week of creation.
there is a disturbing pattern the administrators have of proclaiming their love for freedom of speech in a post, receiving huge backlash, then going on a banhammer rampage. it's happened at least four times /in my memory/, and probably more throughout the site's entire history.
But inflation is still higher than interest rates.
My college was paid for by 12% US Savings Bonds that my parents bought when I was a small child. That late 70s/early 80s inflation went away in the meantime.
Reddit might actually be one of the worst offenders, but because they aren't public, and have a smaller user base, they went unscrutinized. I highly recommend everyone watch the documovie the Social Dilemma.
TLDR; Social media is military grade psychological weaponry aimed at the most vulnerable amongst us.
That would probably be good for the stock value, wouldn't it?
The genie is out of the bottle on this one, and social hackers planet wide are now playing the game.
I use old.reddit.com
The newer UI is just so much bloat.
Bring back IRC style UIs that are data rich and don’t have a million pixels of white padding cause some UX graduate thinks it looks cool.
At some point recently they changed it to ask you every time you visit. There used to be an option to disable the mobile app ads. Funny that that's the only thing they've changed in six years (I left late 2016.)
Respect my preference, or don't offer the better UI at all if you want to punish me for it, or needle me out of using it.
The compact mode on new reddit is actually slightly more information dense than old. Sadly it’s still a crappy, slow JS app, if it was performant I’d switch from old in a heartbeat.
edit: Checked the current state of New Reddit. Yikes! https://i.imgur.com/FnMDjmM.png
If anything, the new UI changes are in service of an IPO, not the reason it would fail.
Don't you rather believe that the reason why Reddit's user experience is worse is that Reddit has economic incentives (e.g. better options for ad placements; advertisers prefer this US; ...) to do so?
Its like no one involved in the design used Reddit regularly. Reddit's best quality was the way it made forums work at scale, but they tried to copy content feeds at the cost of community. That's why old.reddit, Apollo, and RIF are the better experiences for using Reddit - you can engage in community more than just consuming memes and gifs. Certainly a part of that is incentives, but the job of good leadership is to push back and point out that Reddit isn't Twitter or Instagram.
And even if they wanted to make it like Twitter or Instagram they really screwed the pooch by having terrible stability and performance.
That now redirects to some low-content page with obfuscated numbers that haven't been updated in 2 years. And it's not for lack of updating. The one thing I did learn from that page is that they just hired a new VP of UX, yesterday.
I used to use reddit constantly and they've killed all the useful subs, made the mobile ux nigh unusable, and turned the user based in to a leftwing circle jerk.
So now I barely ever use it.
This limitation keeps me from getting too addicted to the site while still enjoying it. I used to have a several-years-old account that I'd spend hours arguing politics with. Complete waste of time. Deleted it.
This requires low short-term and long-term rates for more than one fund cycle. That puts the IPO out, at a minimum, 5 to 7 years. It also puts it at odds with most near-term rates forecasts. If Reddit is waiting for peak valuations to go public, they'll be waiting for 10+ years or, more likely, be bought while running out of money, because waiting for multiples to change as a business strategy is a piss poor one.
Present multiples do not convey this is a fearful market [1].
Ultimately, remaining private and trying to grow a sustainable, profitable business isn't going to be what they choose. I didn't even get into the porn situation, which may be why they decide to just go the tumblr route and try and cash out to a larger tech co though.
This sounds like something management would claim, but how so? What's inherently more appealing or engaging about the app, especially when you're practically forcing people to use it?
It is hard to groom a community, but if you have this many public denigrations, there's problems in the company AND on the site.
The IPO goes away when the independent cash value of the company dropped below the business value of the distribution channel.
I went to flag it but there was absolutely no option within the flag reason. Commercial astroturfing is 100 percent okay on Reddit, in other words.
Is that because of Conde Nast owning it? They must own a portfolio of ad and product stuff.
Looking forward to v2, whatever that is.