Valerie Nelson’s Post

By now, I'm sure you've heard of Reddit's IPO. As a big user of Reddit and an accountant, it was only natural that I'd take a look at its accounts. My article below looks at: 👉 What is Reddit? 👉 Revenue model & future plans 👉 Business risks & challenges 👉 Non-financial and financial performance Take a look and let me know your thoughts on Reddit and its future!

Reddit did not pay their CEO $193M last year. https://lnkd.in/eWtkaSCc He was granted $98M in stock awards and $98M in stock options. Those have a lot less value if the IPO doesn't get done and could be worth less if the IPO does get done, but the share price sinks post closing. Part of the stock awards do not vest until the IPO is completed, some vest each year over the next 5 years. While he has the opportunity to make $193M in value, he wasn't paid $193M last year (as in he can't spend $193M in cash right now). He is unlikely to be able to borrow against that either as the Company is private. Why would the board have granted him such a large number? Getting an IPO done is HARD. We hear about IPOs all the time, but the truth is, we don't hear about all the IPOs that don't get done each year. An IPO is going to be led by 2-3 investors. Those 2-3 investors are going to account for 30% of the deal (let's say $30M) and the likelihood they would want to invest into a business that has been around this long, had this kind of visibility and is just stepping into the CEO seat is highly unlikely. If the board hired a new CEO today, investors would want to see success for the next 2-3 years before they invest into an IPO. he board is giving Huffman a small pay package (relative to the value of the firm if the IPO is successful) to get the IPO done. Given the lack of success at SNAP post IPO, it is going to be a hard task to see Reddit succeed as a public company, but we think it is relatively under-monetized for the size of its user base. It is pretty common today to see top comments have 4-5k likes in the first 24 hours, which was rare 2-3 years ago.

**Reddit IPO: A Promising Milestone for Investors** **Summary:** Reddit's Initial Public Offering (IPO) has gained significant attention, as the social media platform's shares closed up 48% on their first day of trading. This surge in stock value indicates a renewed investor interest in IPOs from promising yet unprofitable companies. Reddit's appeal was further strengthened by its... 🌟 **Investing for a Healthy Future** 📈 **Capitalizing on Promising IPOs** 🚀 **Breaking Barriers with Reddit's Surge** 💰 **Unleashing the Potential of HSA Investments** ⏳ **Don't Miss Out on the Reddit IPO Boom!** **Summary:** The recent Initial Public Offering (IPO) of Reddit, marked by a staggering 48% increase in stock value on its first day of trading, is a remarkable milestone for investors. It signifies a renewed interest in IPOs from companies with promising potential, despite being currently unprofitable. Investors are captivated by Reddit's unique appeal, bolstered by its... (fill in with specific details). This surge presents an exciting opportunity for investment growth within Health Savings Accounts (HSAs), combining the benefits of tax advantages with potential market gains. By capitalizing on promising IPOs like Reddit, HSA account holders have the chance to unlock significant returns on their healthcare-focused investments. Embrace the power of investing in your health, family, and wellness today, and leverage the potential of HSAs for a financially secure and prosperous future. Don't let the Fear of Missing Out (FOMO) hold you back! Take action now to explore HSA investment opportunities and join the conversation on #hsa #investing #healthcare #health #family #wellness. 🌟📈🚀💰⏳

Social media platform Reddit's shares ended their first day of trading in New York up 48%, signaling that investor appetite for initial public offerings of promising yet loss-making companies could be returning.   Reddit, Inc., which has not turned an annual profit since launching in 2005, lured investors by positioning its content as training grounds for artificial intelligence programs. Reuters reported last month that Reddit struck a data licensing deal with Google worth about $60 million a year.   Read the full story for more ⬇️ #Reuters #news #Reddit #ArtificialIntelligence

𝐑𝐞𝐝𝐝𝐢𝐭 𝐢𝐬 𝐠𝐨𝐢𝐧𝐠 𝐩𝐮𝐛𝐥𝐢𝐜 𝐭𝐡𝐢𝐬 𝐰𝐞𝐞𝐤, 𝐚𝐧𝐝 𝐢𝐭'𝐬 𝐠𝐨𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐜𝐮𝐥𝐭𝐮𝐫𝐞'𝐬 𝐥𝐨𝐬𝐬. In 2017, Seth Stephens-Davidowitz made waves with his book "Everybody Lies": how google search reveals our darkest secrets.   The thesis was that much of traditional survey data is flawed. People respond in ways they want to be perceived, rather than in ways they actually are.   We want to think of ourselves as more generous, successful, confident etc. than we really are. So when we answer surveys, we respond in these inflated ways not malignantly, but out of an inherent hope that we are these idealised versions that we imagine ourselves to be.   "Everybody Lies" showed that looking at actual behaviour, through the lens of google searches, reveals far more about our true thoughts, intentions and fears.   For me, Reddit occupied a similar territory of authenticity. It has always represented a rich vein of access into raw, unedited - often crazy but underpinned by truth - thoughts, feelings and the not-socially-acceptable things to say or feel. It can be a dark place, often not an accurate or factual one, but an honest portal of expression.   As someone fascinated by insights, Reddit can be a rich playground of behaviours and ways of being that aren't often expressed through the niceties of real-life.   But with shareholders to answer to, even if many are hoped to be Reddit users and moderators themselves, I fear we will lose this insight into the rawness and wildness of our online human natures. And culture may be poorer for it. #insights #reddit #IPO

My latest newsletter - What did we learn from the Reddit IPO (hint - data data data) ...And How to Find and Profit from Trends with NO Friends (using @stocktwits data) https://lnkd.in/gJE_cFDX

Reddit IPO: should you invest in Reddit now? Our view. The Reddit IPO has been a hot topic recently. Should you invest in Reddit now? Here we provide our view and analysis. Key Highlights of Reddit IPO: Initial Public Offering (IPO): Reddit, the popular online community known for hosting millions of forums, began trading on the New York Stock Exchange (NYSE) under the stock ticker “RDDT.” The IPO was priced at $34 per share, which was at the top end of the expected range. Reddit and selling shareholders raised approximately $750 million from the offering, with the company collecting about $519 million. The stock opened at $47 and reached a high of $57.80, marking a 70% increase at its peak for the day. It closed at $50.44, giving Reddit a market capitalization of about $9.5 billion. On March 25th Nasdaq will list options on Reddit. The contracts will be listed across all 6 of its exchanges, which is still subject to approval from the listing qualifications team. Investor Appetite for New Tech Stocks: Reddit’s IPO is testing investor appetite for new tech stocks after a dry spell for IPOs. Since the peak of the technology boom in late 2021, hardly any venture-backed tech companies have gone public. Reddit’s valuation at IPO was approximately $6.5 billion, a decrease from its private market valuation of $10 billion in 2021. Financials: Reddit’s annual sales for 2023 rose 20% to $804 million from $666.7 million in the previous year. The company recorded a net loss of $90.8 million in 2023, narrower than its loss of $158.6 million in 2022. Based on its revenue over the past four quarters, Reddit’s market cap at IPO gave it a price-to-sales ratio of about 8. Comparison with Other Tech Companies: Alphabet trades for 6.1 times revenue, Meta has a multiple of 9.7, Pinterest’s sits at 7.5, and Snap trades for 3.9 times sales. Reddit’s business model Reddit, often hailed as the “front page of the internet,” has a unique and multifaceted business model. Community-Driven Content Platform: Reddit is a social discussion forum, a news aggregation site, and an online content rating platform. It hosts millions of individual discussion rooms called subreddits, each with its own page, moderators, and subscribers. Users can post content (text, links, images, and videos) and engage in discussions within these subreddits. How Reddit Works: Votes Matter: Reddit’s algorithm relies heavily on user votes. An upvote on a post gives it more authority and ranks it higher. Subreddits: With over millions of subreddits, Reddit covers a vast range of topics. It’s a thriving community where people discuss everything from memes to serious issues. Never-Ending Content: Revenue Streams: Advertisements: Premium Membership: Coins and Awards: Gifts and Merchandise: Partnerships and Sponsorships: Anonymity and Community Building: Our view and Valuation Key Risks and Challenges More detailed info at www.ki-wealth.com

If you missed Pinterest Presents....see all the big announcements below.

It's been a crazy week if you're Reddit, Inc.—or even if you cover the social media and advertising world, like me. Thank you Reuters for featuring my analysis of why Reddit has started off hot in its first full week of trading—even though it's down over 13% today. Here's the deal. Reddit is not being valued based off of the advertising dollars it expects to bring in anytime soon. What this means is that this is the first major social media company to IPO where investors are looking at it more like a data platform as opposed to an ad platform. Publishers should take note—I'd say your future is more in data licensing (for AI and related purposes) and less in traditional digital ads. https://lnkd.in/gJvJZVh9 #reddit #socialmedia #digitaladvertising

Reddit filed an S-1 form with the Securities and Exchange Commission yesterday afternoon, aiming to go public. Let's recall that it first confidentially filed for an initial public offering in the second half of 2021 but missed its chance to go public. Now, Bloomberg reports that Reddit could ring the bell at the New York Stock Exchange in March. The S-1 filing revealed Reddit's financial performance before going public: ✅ It has 73 million daily users and over 100,000 active communities. ✅ Revenue increased by 21% last year to $804 million. ✅ It doesn't generate profits, reporting losses of $158.6 million in 2022 and $90.8 million in 2023. ✅The S-1 filing also unveiled that the company appears to be capitalizing on the AI boom: "We believe our growing platform data will be a key element in training leading Large Language Models ("LLMs") and will serve as an additional monetization channel for Reddit." The filing also showed that OpenAI's CEO, Sam Altman, holds an 8.7% stake, making him the third-largest shareholder. Regarding valuation, Bloomberg reported that Reddit has been advised to seek a valuation of at least $5 billion. This is lower than the $10 billion valuation the company achieved in a private funding round in 2021. #sp500 #nasdaq #dowjones #russell #wallstreet #reddit #stocks #finance #IPO #inversiones