Redditors dislike IPO

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Redditors have expressed significant dissatisfaction with Reddit's Initial Public Offering (IPO), highlighting a range of concerns that underscore the community's apprehension and skepticism towards the move. The core issues revolve around Reddit's historical lack of profitability, the potential impact on the platform's culture and operations, and the implications for the broader Reddit community, including both users and moderators.

Reddit's Profitability and Business Model

Reddit has disclosed that it has never been profitable, with a net loss narrowing to $90.8 million in 2023 despite a revenue growth of approximately 21%. This financial situation raises questions about the sustainability of Reddit's business model and its future prospects as a publicly traded company. The length of the risk factors section in Reddit's IPO filing, which is longer than those of Twitter and Facebook combined, further highlights the company's vulnerability and the significant challenges it faces.

Community Concerns and Reactions

The Reddit community's reaction to the IPO has been overwhelmingly negative, with users across various subreddits expressing concerns about the potential changes to the platform. These include fears about increased advertising, the introduction of fees for posting, and other measures that could be taken to make the company profitable. There is also resentment towards the erasure of Aaron Swartz as a co-founder and anger directed at Reddit's leadership, particularly CEO Steve Huffman, whose compensation has been a point of contention.

Directed Share Program and User Ownership

Reddit has attempted to ameliorate concerns by offering shares to power users and moderators through a directed share program, aiming to give these key community members a stake in the company. However, this move has been met with skepticism, with some viewing it as a gimmick and questioning the actual value and implications of such ownership. The program's design has also been criticized for not being inclusive enough and for potentially leading to increased volatility in the stock price due to the lack of a lock-up agreement for Reddit users participating in the IPO.

Potential Impact on Reddit's Culture and Operations

There is a widespread fear that the IPO could mark "the beginning of the end" for Reddit, fundamentally altering the platform's culture and operations in ways that could alienate its user base. Concerns include the potential for increased censorship and content filtering, the commercialization of the platform, and the risk of Reddit becoming more susceptible to market pressures and investor demands. The possibility of another moderator revolt, similar to past protests against site changes, underscores the delicate balance Reddit must maintain between its business interests and the interests of its community.

Conclusion

The Reddit community's reaction to the IPO is rooted in deep-seated concerns about the platform's future direction, its financial viability, and the potential consequences for the unique culture and sense of ownership that have defined Reddit. While the company has made efforts to involve users in the IPO process, the prevailing sentiment among Redditors is one of skepticism and apprehension, reflecting broader anxieties about the commercialization of digital spaces and the preservation of online communities.
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