Where Reddit differs among its tech peers is in its striking dependence on its user base to keep things operational. Reddit must keep its users satisfied and its efforts to expand its limited (and already unpopular) advertising formats could send users packing. 98% of Reddit’s revenue is made up of advertising income. And of that, 26% came from just 10 ad clients in 2023. Investors will be watching this closely and expect more diversity sooner rather than later
I predict an initial IPO spike upwards (for maybe 2 weeks) to bait suckers.
That will likely be followed by 2 years or more of bag holding 📉
<Cue sad trombone music>
But from a CEO perspective it doesn’t matter. Highly successful IPO, huge bonus, retirement. Sadly that’s how modern gambling works, hike share prices, cash out.
The new Robinhood
Whoever stacks up on shorts during the fire sale peak in the first three days after IPO is gonna be a very happy sailor.
Last couple IPOs I watched didn’t even make it a couple days before tanking.