And now tell me again that the Reddit Blackout had now effect.
How can the Reddit CEO not be fired?
How can the Reddit CEO not be fired?
So, no, the blackout did not cause this drop in valuation. I'd urge you to read the article before shooting from the hip. From the article:
>Fidelity Blue Chip Growth Fund valued its holdings in Reddit at $15.4 million as of May 31, according to the fund’s monthly disclosure released Friday. That’s down 7.36% from $16.6 million mark at April’s closure and altogether a slide of 45.4% since its investment in August 2021.
Followed by:
>(Worth noting that the vast majority of markdown in the value of Reddit and Discord holdings by Fidelity predominantly occurred last year.)
So, May 31st is when they dropped the value of Reddit. That's prior to the blackout chaos, which occurred in June. Apollo didn't receive notice of the cost changes until the 31st, and didn't announce it was shutting down until the 8th. The blackout occurred after those dates.
Also considering the Reddit brand which IMHO rightfully was way better than the rest of social media (at least until recent events), has now started to make Facebook look good.
The CEO is acting like a Musk fanboy who drank the Kool aid, and is modeling his social media company after a company ran by a guy who's worked administering a social media company for less than a year. I mean, verdict is out on if Twitter will go up or down in value. Why hitch yourself to that train?
These write downs are likely a byproduct of the macro environment. The cheap money has run out and the stock market is taking a hit as interest rates have climbed. Fidelity's valuations reflect what they believe they can sell their share for, and now they believe they'd sell it for less.
If anything, my bet is Spez has been seeing that writing on the wall for a while (either because he read the tea leaves or because of signalling from Reddit's investors) and the API pricing changes are part of a desperate strategy to boost cashflow and hopefully goose their valuation in advance of a hoped-for IPO.
Every single move they have made regarding this change has been the wrong one. Incompetence is reddit's lifeblood, from an outside perspective.
I can't think of a good reason to want to put 3PAs out of business given, based on what we know, those users represent a small minority of total Reddit users (and therefore a small fraction of ad impressions).
So the only logical conclusion, to me, is that they see revenue potential on monetizing API access, and 3PAs just happen to be in the blast radius.
I'm not saying they'll ultimately be right. All I'm saying is, on its face, it does make sense.
if reddit cannot monetize their users, either as a product to sell to advertisers or by converting them to paying customers it's might not be viable as a profitable business.