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Fidelity has cut Reddit valuation by 41% since 2021 investment
- solarmist 3y agoThe timing coincides awfully well with the Apollo developer's revolution about API pricing.
- skeaker 3y agoMy gut assumption just from the title was that the API changes are what triggered this valuation. The change is such a clearly bad move. I can only imagine the reaction will be when such a large percentage of users will wake up and suddenly be totally unable to access the site due to their reddit apps no longer being able to connect.
- joezydeco 3y agoBut if anyone actually read the article, the lower valuation was decided 34 days ago and published last weekend.
- skeaker 3y agoRight, since as I mentioned it was a gut reaction that I had previously. Reddit making such a boneheaded move does make slightly more sense when you learn that it was probably spurred on by dire news like this, but it's still a boneheaded move.
- solarmist 3y agoSure, I know logically it was already long decided, but I wonder about the timing of there announcement.
- joezydeco 3y agoSeems like TechCrunch decided to time the article, not Fidelity.
- sslalready 3y agoLink: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/ https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...
- thorawaycuz 3y ago[dead]
- paulpauper 3y agoReddit was valued at $10 billion when the social media giant attracted funds in August 2021. Fidelity — which has marked down its stakes in many startups including Stripe and Reddit in recent quarters — also slashed the value of its Twitter stake, it disclosed in the filing, valuing Elon Musk’s firm at about $15 billion. wow...elon down $30 billion . lol no wonder he wanted to bail on the deal
- x86x87 3y agoyou're being down-voted since I guess you hit a chord with some people. twitter is absolutely a dumpster fire and at this point they should be happy if they survive. forget about the valuation and try to help it survive.
- suddenclarity 3y agoMore likely because he's beating a dead horse and acting surprised. Everyone knew that Musk overpaid, that's why the deal was approved despite the people running Twitter not wanting to sell. Musk himself has said numerous times that he overpaid and slashed the valuation with 50% months ago.
- deleted 3y ago[deleted]
- ravenstine 3y agoEveryone? I beg to differ. Tons of people love Musk no matter what he does.
- nightshadetrie 3y agoDoes that mean Reddit's valuation for Fidelity is 6B? (given they evaluated it at 10b in their round).
- gary_0 3y agoThe social media race to the bottom is in full swing, and nobody is going to finish it feeling happy. In the end it's going to be a sad story for users and shareholders alike. The fruit is rotting on the vine.
- asdfman123 3y agoReddit got terrible years ago, around the time of the redesign. This is just a market correction.
- dobs_bob 3y agoIt was when they hired Ellen Pao for me
- lockhouse 3y agoI'd be happy if most social media went the way of MySpace and Digg.
- DoesntMatter22 3y agoDigg was pretty nice before the redesign killed it
- WheatMillington 3y agoPersonally I don't consider Reddit to be social media any more than I consider Hacker News to be.
- hk1337 3y agoIt’s definitely a lot more social media now than it was when it started or DiggV4 era.
- gary_0 3y agoIndeed. I would have had a much different opinion in 2013 (and to be fair, old.reddit plus uBlock gives you mostly the same experience), but Reddit as it exists now is definitely social media. (Note that most subreddit mods report that their traffic is ~80% New Reddit users.)
- paddw 3y ago41%... since August 2021. Which is about par for everything in tech (or significantly better in some cases)
- gary_0 3y agoPeople are assuming this drop was caused by the API footshot, but I think it's the other way around.
- CyberDildonics 3y agoYou think a redesign years ago was caused by a drop in price today?
- jascination 3y agoI think they're talking about the policy they announced yesterday that they'll close their API off to 3rd party developers unless they pay a fee in the millions.
- over_bridge 3y agoIt feels like the more a company tries to pump value for shareholders, the less value is left over for users. Reddit has been very obviously working towards an IPO for some time and you can see it in the worsening user experience and onerous (prudish) moderation policies pandering to advertisers. Shareholders are parasites on a company as their interests are one dimensional in favor of themselves. Gotta get that big IPO payout though.
- prepend 3y agoThey keep changing to make the site worse and worse for users. On my iPhone, Reddit.com shows 5 articles when I’m logged in. Old.Reddit.com shows 15. The recently killed compact mode showed even more. To view the same articles I would spend more time scrolling, so I guess I like that. But instead I spend less time on the site.
- vanilla_nut 3y agoCompact mode still exists! Add the suffix `/.i` to any reddit URL and you'll get it back. They removed i.reddit.com and the `/i` suffix but I think the PMs forget to mention `/.i` in their "kill compact reddit" JIRA ticket.
- SQueeeeeL 3y agoPeople really are bizarre addicts. Companies will literally blatantly say they hate you and your moderately healthy use patterns; and people will desperately try to use the site until they eventually get around to killing the service
- misio 3y agoIt took a long time, my account is 15 or 16 years old, but I've not visited the site in a couple of months now. Addict that I was, they managed to cure me with their latest changes, hallelujah.
- vanilla_nut 3y ago
- pyrelight 3y agoI do wonder how much longer Reddit can continue. Based on the numbers I can find, it doesn't look like they're making very much in the grand scheme of things. The best estimate I found was $350M in 2021. Their operational costs and overhead must be very high given the amount of traffic they get (~#18-20 worldwide according to Similarweb) and the amount of data they have to quickly serve. I can't imagine you are anywhere near break even with the infrastructure and operations they need plus company overhead. If true, the API changes definitely seem like a way to try to generate a new income stream that doesn't "take away" something from the base platform that users used to have for free (like Twitter Blue). Seems like a pretty safe play from an investor point of view until you realize that the third-party developers using the API in the first place to build alternative clients are not multi-million dollar companies that can afford the API rates. I don't know who out there is using Reddit data that could pay the proposed rates and still be profitable. There just can't be that many of them for this play to make sense. It's easy to see what will happen. Taking away a method to access your platform that your users are comfortable with (i.e., BaconReader, Reddit is Fun, Apollo, etc) will lead to a good number of those users abandoning the platform, others moving to the official app begrudgingly, and the net effect will be that all of the users are unhappy and Reddit will likely not be earning enough from their API to make it all worth it. And through it all their official app will probably stay untouched or barely updated. Or maybe they'll buy the most popular cross platform client and retool it to be official. I honestly don't know why they never tried to monetize their subreddits. Imagine a monthly fee for: - Additional moderation tools - Additional design tools (i.e., force old design forever) - Slotted template layout for more design flexibility - More moderator slots, more flair, etc - Built-in highlighted community member feed at the top of the subreddit -- who in the community is live right now on YouTube, Twitch or Reddit, etc. Imagine the Final Fantasy 7 Remake subreddit having some of the mod team do a live head-to-head speedrun race streamed live in the subreddit. - Custom emotes like BTTV/7TV on Twitch, etc). - Dedicated account manager to help handle brigading when the topic of the subreddit has a bad day in the news cycle and 4chan is bored and starts spamming the sub. The larger communities would definitely buy into that. Some of these features could also be added to a monthly user subscription too. For example, you could get a handful of awards you can give out to posts as part of your sub (like Discord Nitro gives 2 server boosts). Official subreddits could also be a thing -- imagine Xbox paying a few grand to make it the official subreddit and gain direct access to Reddit Admins, better tools for managing customer complaints and support tickets directly from the platform, lots of user metrics and data, etc.
- twoodfin 3y agoReddit is well into its second decade of existence, and already had at least one “exit” via Condé Nast. In what sense is it proper to continue to refer to it as a “startup”?
- droopyEyelids 3y agoI feel like the definition of “startup” changed quite a bit, but not as much as the word “hacker”
- MuffinFlavored 3y ago> In what sense is it proper to continue to refer to it as a “startup”? Does it have a "ticker" yet on NYSE/NASDAQ?
- seydor 3y agoapparently startup means "not being public" because "being public" is the real "cashing out" at which point they stop "starting up". They actually begin to "shut down"
- dfex 3y agoI don't recall where I read it, but this process was described best as the transition from a "start up" to an "end up"
- LatteLazy 3y agoIn fairness, all valuations were massively overinflated by zero-ish interest rates. Now rates have gone up by about 8x cutting 41% from speculative valuations is pretty good...
- sharts 3y agoI'm surprised it has any value left.
- kgbcia 3y agoIt used to be a good website, but due to moderation, forcing users to use the app, and just the corny user base I find it unbearable sometimes. however, in the age of LLMs this a greater database to train on
- RickJWagner 3y agoReddit is both fascinating and infuriating. It's got more good content leads than any other social media site, but most sub-reddits seem to be inhabited by bored, angry 15 year old males. I'm waiting for something similar, but more mature, to emerge. Won't that be nice!