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Reddit wants to raise $748M with IPO, sets value at $6.4B (go.theregister.com)

submitted 6 months ago by jeze@lemm.ee to c/technology@lemmy.world

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[–] JohnEdwa@sopuli.xyz 25 points 6 months ago (2 children)

Because profit requires you to pay taxes. It's not uncommon at all for growing companies to invest and otherwise use up any profit they generate so the balance sheet stays negative while the company keeps growing in value.
Also allows you to cry how those dirty 3rd party app developers are stealing all your profit boo hoo.

When you look at the revenue growth of reddit, it's not hard to see that if they were able to function at all when they had a revenue 1/10th of what it's now, they could turn profit if they wanted to.

[–] UnderpantsWeevil@lemmy.world 13 points 6 months ago (2 children)

It’s not uncommon at all for growing companies to invest and otherwise use up any profit they generate so the balance sheet stays negative while the company keeps growing in value.

That's absolutely true. But what exactly has Reddit been expanding into? Its not like they've got AWS like Amazon or they're rapidly expanding their infrastructure footprint like NextEra or some novel product like OpenAI.

As far as I can tell, the company's biggest primary expense is administrative overhead. Not exactly value-add.

[–] AbidanYre@lemmy.world 9 points 6 months ago* (last edited 6 months ago)

Given that CEO pay was like 30% of their budget last year, administrative overhead seems like a good guess

[–] JohnEdwa@sopuli.xyz 7 points 6 months ago* (last edited 6 months ago) (1 children)

Not a clue, but they did go from having 230 employees back in 2017 to 400 in 2018, 700 in 2021 to finally over 2000 in 2023.
So they have to be doing something. ...right?

[–] hypnicjerk@lemmy.world 2 points 6 months ago

(super smash bros announcer voice)

IMMINENT LAYOFFS!

[–] db2@lemmy.world 4 points 6 months ago

You mean Steve Huffman has said something that isn't true? This is totally unprecedented! 🤡🤣