A lot of people on the site don’t like the IPO

Reddit IPO Shares Will Not Satisfy Users: A Case Study of r/Stardew Valley Community Moderators

“I think it’s pretty cool that Reddit is doing this IPO offer to their mods and users,” a Reddit user who asked me to identify him as Kevon tells me. “It’s a nice little thank you that actually may have some monetary value.”

“Reddit has a very rocky history,” says Alex Cook, a volunteer moderator (or “mod” in the community’s lingo) for several gaming subreddits. I see it as a very risky investment.

Last year, some users were angry over the company’s decision to charge for access to itsAPI which was used by software developers to draw on user posts. The fees led to several popular independent Reddit mobile apps shutting down, and protesting users temporarily closed some forums on the service for weeks in a failed effort to pressure the company into reversing course.

IPO shares won’t soothe lingering frustration, says a user who goes by Rat and volunteers as a mod for the r/StardewValley video game community. “I guess this could be their attempt at the ‘pizza party,’” Rat says, referring to a conciliatory gesture commonly offered to children.

The Redditor Ipo User Risk: What Happens When You Unload the Put-Cannon with Malicious Intent?

The S-1 is a document filed with the US Securities and Exchange Commission before a company goes public. It discloses all sorts of things: revenue figures, risk factors, key data about the business. And it sends certain signals. In this case: I see some meme stock shit.

This person said that loadings puts into the put-cannon with malicious intent. (For those not up on the parlance, they’re intending to bet the stock goes down. Given the use of “put-cannon,” I assume they’re betting heavily. I am imagining a situation in which one loads the put-cannon without intending to hurt anyone.

Various Reddit revolts have made clear that the site is more vulnerable to users than other sites. Its model of community moderation has upsides — it means that the 60,000 mods are more familiar with their community than contractors would be. The internet company does not pay them and thus will have a harder time controlling them.

If you squint, you can kind of see how Reddit is trying to ameliorate that risk by offering shares to power users. Because they’re shareholders, they’ll want to keep their own shares valuable. That means they’d be less likely to do things that would cut off advertising revenue, like abruptly shutting down a subreddit in protest.

Reddit’s directed shares program works like this: Qualified users — people with enough karma or who have spent enough time working as mods, basically — received an email from the company that asks them to provide certain personal information to pre-register for the program. After three weeks, everyone will receive an email telling them if they qualified. There could be a waitlist depending on how many people sign up. The people who did qualify will get further instructions but they are not clear about what that entails.

Source: A lot of Redditors hate the Reddit IPO

The Community of Reddit During the S-1 Era: A Brief History of a Possible Loss of Money in Content Moderation

Kevon says it is a nice thank you to people who have contributed. You’ve sunk hours of your life into being a Reddit mod, and you’ve bought shares. There’s a possibility you’ll lose money — and effectively pay for the privilege of content moderation. Fun!

The share program “seems like a gimmick to me honestly,” says Dan M., who also received the offer. After all, it’s not like the shares are being given away for free, he says.

All of the Redditors I spoke to for this story enthused about Reddit as a community. In an internet era of social media engagement bait, it’s one of the bright spots. It’s a place where there are still enthusiasts and experts, where people can still learn things, says Dan. The other part of the internet is quite chaotic, but it still feels like a place for learning and having fun, according to a person who has also received an invitation and is considering buying into the share program.

But a good community isn’t quite the same thing as a viable business. Despite being founded in 2005, the S-1 states that there is no assurance that Reddit will be able to scale their business for future growth. Most of Reddit’s revenue comes from advertising, but it hasn’t been very good at making money. That might be because of its laissez-faire approach to moderation; hate speech wasn’t banned from the site until 2020.

Plus, user engagement isn’t regular. The war in Ukraine and the release of the video game Elden Ring led to spikes in user engagement. And a lot of users are passive, not even logged in. Targeting is more difficult than you might think.

Sure, Reddit’s trying to diversify its revenue by selling its data to help train AI; I don’t think the timing of that Google deal, just days before the S-1 became public, was a coincidence.

The forays into web3 — beyond the Bitcoin and Ethereum holdings, the value of which Reddit did not disclose in its S-1 — make me a little suspicious about the shares being offered to users. The Community Points were a gimmick; are the shares a gimmick, too?

Steve “u/spez” Huffman is to be blamed for these gimmicks. He has made a lot of strange decisions. He’s said that the API price increase last year that led to user protests, for instance, was partly because “Elon Musk did it.” (How’s Twitter — sorry, I mean X — doing with advertisers, spez?) His PR tour during the Reddit rebellion was frankly disastrous.

In the S-1, Huffman is a risk factor, but perhaps not properly. “Huffman is critical to the management of our company and instrumental in the development of our technology and our strategic direction” and thus hard to replace, the S-1 says. The actual risk factor is the number of people who think “fuck spez” is a great catchphrase, because his job depends more than any other social media CEO’s job on keeping the users happy.

I was told by someone who was thinking of investing that they thought he was overpaid. Huffman is listed in the filing as making $193 million in 2023. He was surprised that he made a lot of money.