Business Fidelity has cut Reddit valuation by 41% since 2021 investment

https://techcrunch.com/2023/06/01/fidelity-reddit-valuation/

https://archive.is/fYGnj

Manish Singh@refsrc / 5:33 PM EDT•June 1, 2023


Fidelity, the lead investor in Reddit’s most recent funding round in 2021, has slashed the estimated worth of its equity stake in the popular social media platform by 41% since the investment.
Fidelity Blue Chip Growth Fund’s stake in Reddit was valued at $16.6 million as of April 28, according to the fund’s monthly disclosure released over the weekend. That’s down 41.1% cumulatively since August 2021 when the asset manager spent $28.2 million to acquire the Reddit shares, according to disclosures the firm has made in its annual and semi-annual reports.
Reddit 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.

Reddit declined to comment.
This devaluation, part of a broader trend that has hit a variety of growth stage startups across the globe in the past year, raises uncertainties about whether Reddit will maintain its initial intent to reportedly go public at a valuation around $15 billion.
Reddit, which has raised over $1 billion to date, counts Sequoia Capital and Andreessen Horowitz among its backers.
The current wave of valuation cutbacks sheds new light on the impact of deteriorating worldwide economic conditions on fledgling startups. Despite the diminished funding activities for startups globally over the past year, valuations of numerous larger startups have stayed constant.

 

[xX_rAcE_wAr_420_Xx]

I think it's a admission that reddit doesn't have the capability to do the things you mentioned.

Reddit's credibility as a cultural phenomena is completely manufactured and is a "top tech platform" with nothing organic about it. Everyone treats Reddit like a joke and not to be taken seriously because of that. God bless them, they tried to turn the site into a cultural Internet Mecca, but that ship sailed 10+ years ago.

Bottom Line: Reddit doesn't get the job done. Financial resources aren't as abundant to dump money into a failed project that doesn't get the job done with no path forward.

The wild part is, at one point it WAS a top platform. "The front page of the internet" wasn't too far off, it had a ton of very good hobby subs (one of the only things still vaguely usable about it tbh), the discussion was good and robust, and it had better gaming forums than a lot of official forum sites. I still remember back in the day when you could get eyes from game devs and moderators by posting on the game's subreddit, similar to @ing them on Twitter these days. You didn't get everyone on Reddit, but you got the bulk of an audience who cared about things, and would put lots of time and effort into building useful communities and tools.

Now you just get the cross-section of a given audience comprised of histrionic faggots and people whose entire vocabulary is DSM diagnoses and therapy-speak. Overbearing moderators totally captured the useful forums, political discussion got totally one-sided, and the entire place is sanitized for anyone who isn't a commie playing video games and smoking weed out of a funko pop. It seems like that's a lot of people these days, but maybe Reddit's financiers realized that they're only broadcasting the message to the most niggerest of cattle who would have believed it regardless of how many epic AMAs get posted by their favorite heckin' celebrities telling them to vote blue, no matter who.

I have such a seething contempt for Reddit, it's unreal. It was never the best-designed platform, the voting system is kind of ass, but it went from being a solid one to brimming with the most detestable faggots imaginable.

 

[D_Tractor]

You can still say nigger and faggot on /r/4chan.

 

[innocent jogger]

Wtf is "Reddit"?

 

[Positron]

Reddit has value?

 

[Mojo Thief]

I'm gonna bet they dropped their valuation after Reddit told them that they would control costs by limiting moderator compensation.

 

[Maggots on a Train v2]

reddit's always had a bot problem, much worse than even twitter, and now that it has been revealed in the last week that the admins have been bullshitting engagement with foreign language subs a lot worse news about them is probably due to come out soon.

They're definitely lying about traffic/users. They let you see some alleged "analytics" on your own posts, and it's obviously bullshit. You can post something to an almost dead community, where nothing ever gets upvoted, and reddit will say you got hundreds or thousands of views in a few hours. Check your own site to see how many people clicked a link, watched the video, downloaded the file. It will really be like 5 people.

 

[seri0us]

Jokes on you. Reddit has been astroturfed by ActBlue since 2016.

At least since 2013, when their "most addicted city" happened to be an air force base!

 

[cybertoaster]

Thing is reddit was just popular because it was more n00b-friendly just like digg was, of which reddit is a clone that only got traction after digg decided to shot itself in the head of some reason. Back then the social part of the internet were forums not unlike the farms here except even more limited, few had built-in image hosting because server costs were insane, and forget about video. Point is normies couldn't figure this out, but the digg/reddit model is easy as hell.

But what made reddit really popular was when they allowed anyone to make a subreddit. That's when it really exploded because anyone could make a mini forum about anything, but all other "forums" were connected and you could use the same account on all, think fediverse now.

It got really popular in the bay area for a while and that place its a bubble inside a bubble meaning that an investor there seeing how all his peers are on reddit automatically assumes the entire planet is on reddit too.

Today? as someone said the reddit userbase its mostly losers, stoners, mentally ill people and sexual pests, or a combination of all of these. This is very low value, there's very little content being made or posted, I seen many subs that were famous for starting things and now its just posts about things that started in other platforms, anyone who actually contributed is long gone.

some of the porn stuff is really bad.

How bad? I don't sub to anything NSFW because of work, tho I still get thots dropping their links. I swear the chat feature only exists for spam.

But it was valuable. Not in any real tangible physical asset type of way but as a social engineering asset. Such sites, along with places like twitter etc are one of the key tools for social control.

Social media like twitter, fb and tiktok its way better for social control because people tend to use their real name there thus producing tons of valuable kompromat. Meanwhile the last time I saw a reddit account with a full name was when a politician was doing an AMA there.

 

[Male Idiot]

41%? TRD! Kek is showing his displeasure with the soybugs. Pepe poopoo!

 

[sadrefrigerator]

The really interesting question is why has the value dropped so much now?

All those social media/user content generated sites make most of their money through ads.
During a recessions/ high interest rates, profitability matters more than growth, and adspend drops. Reddit has never been profitable, though like many companies, they can instantly become profitable by firing enough of their staff. The problem is that Reddit doesn't do ads well. The conversion rates are very low, and you have more traction by having a highly voted post rather than a highly visible ad. Recessions test the company's viability, and the numbers for reddit don't look good. Theres a reason instagram ads are much more expensive than reddit ads

 

[pisswomble]

How bad? I don't sub to anything NSFW because of work, tho I still get thots dropping their links. I swear the chat feature only exists for spam.

Stuff that is Illegal in the UK, rape stuff and proper violent shit.

I'd never click that random NSFW button because you could get anything so I couldn't really tell you what the worst stuff is. I remember an MP talking about the Rape and violence stuff a while ago.

 

[moocow]

The really interesting question is why has the value dropped so much now?

The seemingly endless fountain of cash coming from the ESG hedge fund crowd is slowly drying up. "We don't need to make customers happy because we get ESG money anyway!" can only last so long before that cash starts to run out, too. It doesn't necessarily mean the funders are actually running out of money; it just means they're sick of pissing it away on increasingly useless endeavors.

Why do you think Twitter is suddenly being "devalued" so much? Besides arguing it was overpriced in the first place, it's also simply losing its value as a propaganda tool (like reddit is). One of the biggest reasons the tech industry is taking such a beating right now is TPTB are realizing some of the levers of power there are falling into "enemy" hands, so that "infinite money" tap it relied on is closing. Like any bubble pop, (most) companies that actually produce legitimate products and provide legitimate services will be okay. Propaganda distributors will be the hardest hit.

 

[Harbinger of Kali Yuga]

If you browse reddit, you'll also see that really not many companies all pay for ads on reddit. There was one Christian one that had a big ad campaign on reddit awhile back, and I think the only reason the reddit admins allowed that was because reddit is strapped for cash as it is.

 

[Honored guest]

No, sex stuff is huge on reddit, it's probably more profitable than anything else on reddit. I've heard they've improved some NSFW stuff on the backend, but are starting to forbid third party apps from showing NSFW stuff apparently... the reason is related to reddit's API no longer being free. It's really looking like some sort of subscription service is coming. It's literally porn but the users provide the content. All reddit has to do is stick their beak in and they can make good money off of that. If they can get people to pay.

Sex stuff was HUGE on Tumblr to, and when they banned it even the bluehaired, twinkle sexuals left en masse for Twitter. From what I remember just like Tumblr Reddit has/had a child porn problem, only in this situation its groups of tranny coomers dumping their personal spank banks on subreddits that they don't like to get them banned. The mere mention of child porn sends buyers/investors scurrying away, and payment processors dropping the hammer. So I could see them either banning porn entirely or moving it all to a sister site in hopes of making some money.
As for a paid service when the users provide the material, I don't see that working very well as there are many free alternatives especially now with all the porn Discord servers available. The Tranny coomers can even still groom/creep on children/teens on those servers just like Reddit.

 

[Harbinger of Kali Yuga]

Sex stuff was HUGE on Tumblr to, and when they banned it even the bluehaired, twinkle sexuals left en masse for Twitter. From what I remember just like Tumblr Reddit has/had a child porn problem, only in this situation its groups of tranny coomers dumping their personal spank banks on subreddits that they don't like to get them banned. The mere mention of child porn sends buyers/investors scurrying away, and payment processors dropping the hammer. So I could see them either banning porn entirely or moving it all to a sister site in hopes of making some money.
As for a paid service when the users provide the material, I don't see that working very well as there are many free alternatives especially now with all the porn Discord servers available. The Tranny coomers can even still groom/creep on children/teens on those servers just like Reddit.

I'm not saying it's a good idea. Reddit has never really made any good business decisions. It's always kind of been run like amateurs.

 

[Train Lover 2000]

You can still say nigger and faggot on /r/4chan.

That's on /r/greentext. On /r/4chan, the trolling automod will delete your comment and tell you to use nigger-slur or faggot-slur instead.

 

[Absolutego]

I sincerely hope Conde Nast forces the IPO through anyways. I cannot wait for reddit to have some dramatically overpriced IPO and for the stock market to immediately force them to eat shit.

Imagine the kinds of bullshit they'll try to come up with to monetize their terminally online userbase, when the heckin wholesome awards admins had to hand out like candy just to make them look popular can't measure up.

 

[make_it_so]

All jokes that headline produces aside, the idea that a website that is ultimately just a hub for a bunch of glorified message boards could ever be worth $15 billion is insane. I see this is a sign that some bit of sanity is starting to return to investors and so the tech bubble is about to pop.

 

[Harbinger of Kali Yuga]

I sincerely hope Conde Nast forces the IPO through anyways. I cannot wait for reddit to have some dramatically overpriced IPO and for the stock market to immediately force them to eat shit.

Imagine the kinds of bullshit they'll try to come up with to monetize their terminally online userbase, when the heckin wholesome awards admins had to hand out like candy just to make them look popular can't measure up.

I hope they IPO reddit so I can hold a short position in it.

 

[AnOminous]

Reddit's credibility as a cultural phenomena is completely manufactured and is a "top tech platform" with nothing organic about it. Everyone treats Reddit like a joke and not to be taken seriously because of that. God bless them, they tried to turn the site into a cultural Internet Mecca, but that ship sailed 10+ years ago.

Reddit was just in the right place at the right time, when digg basically committed suicide.