Mark Hanna: Number one rule of Wall Street. Nobody - and I don't care if you're Warren Buffet or if you're Jimmy Buffet - nobody knows if a stock is going to go up, down, sideways or in circles. You know what a fugazi is?

Jordan Belfort: Fugayzi, it's a fake.

Mark Hanna: Fugayzi, fugazi. It's a whazy. It's a woozie. It's fairy dust. It doesn't exist. It's never landed. It is no matter. It's not on the elemental chart. It's not fucking real.

https://youtu.be/wM6exo00T5I?t=108

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Perry 24 points 3 years ago

So imagine that you have a lemon tree that grows the finest lemons in the neighbourhood. You know that with those lemons you could make the meanest lemonade and make a ton of money selling that. The problem is that in order to do that, you need to buy a juice press, a bunch of sugar and maybe throw together a dashing lemonade stand that will draw attention to your business.

The issue is that you don't have any money to buy those things and even if you know you will get rich down the line, the whole project is a dud if you can't even build your lemonade stand.

Enter Mr. Money Bag. I have a whole €1,000 just sitting there in my wallet not doing anything. I would really like that many to become bigger so I look for a way to do that. I have however seen your lemon tree and the awesome lemons it produces. With those lemons I absolutely believe that you can make the greatest lemonade the world have ever seen and I believe the only thing you need to do that is more money.

So I agree to give you those €1,000 in order to build your lemonade stand and in return I will take some of the money that you make from selling the lemonade. It will however take a few weeks for you to do that and until that is done the materials will probably cost more than what you're making from the lemonade.

That's OK for me, though. I wasn't doing anything with that money anyway and as long as I trust that you can still make a bunch of money when it's finished, I'm fine with it. In fact, I decide to give you another €100 to put up a sign in order for more people to find your business quicker.

So everything is tugging along and now you're actually making more money than you spend, so you give me an amazing €1.200; €100 more than I spent! You also get some money, which is awesome because now you can buy yourself that rocking NiN T-shirt you've always wanted. Now this is great, except I still don't actually need that money, not right now at least. So I tell you to keep that money in the company and build an additional even better lemonade stand which will make us twice the amount of money in a few weeks.

Currently, your company haven't made a single cent, but that's fine because your business is sound and everything is tugging along exactly as planned.

Eventually, I decide that I actually want to buy a new high end TV so I actually need some money that I can spend right now. I know that in about ten weeks this company will have made at least €20,000 that it can either invest in further expansion or give back to the owners. So I go to my buddies Greg and Lisa who definitely have that amount of money and tell them that they can buy this company for €20,000. Greg also owns a carpentry which he can use for building even more lemonade stands and Lisa is really good at making signs so with them the company might even make €40,000 in the same time.

So Greg and Lisa together buy my part of the company for €20,000. I get to watch Eurovision on my new 70 inch TV, and Greg and Lisa will together make €40,000 in a few weeks so everyone is happy.

Then after a few months, someone realises that your lemon tree can really only grow a basket of lemons a year and you can't actually grow enough to make the money you hoped for. Everybody panics, the company's value plummets and eventually closes down.

Greg and Lisa are mad because they didn't make the money they hoped for (they did however get back €5,000 from selling the lemonade stands to a neighbor who was about to start an apple juice business). You're also disappointed, but at least you still have your NiN t-shirt. Your gardener goes to jail for some reason, though.

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JohnEdwa 15 points 3 years ago

If you buy a house with a loan and pay it back, you haven't turned a profit either - but you do now own a house that has a theoretical value. That's basically how these things work, investing everything on growing the company in the hopes that some day what they have built can start creating profit, or be sold to someone who thinks they can.

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Sordid 8 points 3 years ago

I get that, but who would want to buy a company that's never been profitable? It smacks of a scam. "Hey, bro! Buy my company! It never managed to make any money for me, but it'll be highly profitable for you!" Sounds like the company founder is looking to pull a fast one and laugh all the way to the bank while their investor is left holding the bag.

The only way I can see this working is if the idea is to build a large user base by offering a good user experience, i.e. not monetizing the platform very much, just enough so that it barely pays for its own operating costs. Then you sell that user base to someone else for the express purpose of shoving tons of ads down everyone's throat. In that case it's still a fast one, only in this scenario the users are the victims. But even then I'm skeptical. If that's the plan, why sell the company instead of enshittifying your platform yourself?

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DreamerofDays 6 points 3 years ago

only in this scenario the users are the victims

Have you heard of our lord and savior enshittification?

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JohnEdwa 5 points 3 years ago

why sell the company instead of enshittifying your platform yourself?

Because it's a lot easier to find someone who thinks they can do it than it is to actually successfully do it yourself - as we are currently seeing with how wonderfully incompetent Spez is with Reddit.
When Yahoo bought Tumblr for $1.1 billion in 2013 - only to sell it for $3 million in 2019 - was Tumblr bringing in millions and millions of profit? No. But Yahoo thought that they would be able to make it.
Elon Musk paid $44 billion for Twitter, it hasn't turned any profit either (and never will enough for him to get his moneys worth, but that's just because Musk is an idiot).

But yeah, quite often it does feel like a scam. Or kinda like... gambling? You hope someone will pay a lot for your company, while they hope they can make it turn wildly profitable, both may or may not come true.

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luna 3 points 3 years ago

Profits don't matter under capitalism, it's only stock money. Trying to profit is a death sentence in the tech space, as we're all seeing right now. This system doesn't work for the 21st century

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Cryst 1 point 3 years ago

A houses value is not theoretical though. You own land and a roof to live under. It's not about making profit. Companies don't have value outside of making a profit. Now that I type that I see they actually can have value. Such as political sway or if it's a company that has some value beyond money, like education or taking care of the needy. But you'd have to find someone willing to sink money into them simply because they find value beyond money.

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JohnEdwa 5 points 3 years ago

A houses value is not theoretical though. You own land and a roof to live under

But that doesn't mean you can turn a profit from it, or even break even. If you want to do that you have to sell it to someone, and there are multiple reasons why you might not be able to - maybe you spent too much money renovating it and now nobody wants to pay that much. Maybe a bunch of new housing was built and the value crashed. Maybe Detroit happened and the location and land it sits in is literally worthless and nobody wants to live there. - until you actually find a buyer for it all houses have only a theoretical value, as do all companies.

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cowvin 5 points 3 years ago

Well it depends on why the company has never managed to turn a profit. A great example is Amazon. I think it existed for like 15 years before it first turned a profit because it was aggressively growing and spending all of their income to try to grow more.

As for Reddit, they are not growing like Amazon did. However, capturing a large user base is worth something because they may be able to monetize those users eventually. Investors view simply having a large user base as pretty valuable.

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scutiger 2 points 3 years ago

Amazon was built on venture capital for over a decade. It was expected to be unprofitable for a long time, and investors knew that going in.

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copium 35 points 3 years ago

Let’s be honest, 10 billion valuation was from august 2021 when cash was floating around everywhere.

Of course it’s not worth it anymore, I’m not sure at all it’s related to the protest but more too the current economic state

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RojaBunny 34 points 3 years ago

Is there a reason discord is also being devalued? I haven't heard of anything negative going on there and they seem to be doing fine.

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CthuluVoIP 62 points 3 years ago

Recent data breach, and users being unhappy with the username rollout.

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OtakuAltair 51 points 3 years ago

It also just generally feels bloated nowadays... I just want to chat

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CthuluVoIP 36 points 3 years ago

Agree, personally. Nitro ads are getting more intrusive too. I understand they have to monetize somehow, but I wish it were handled based on server population rather than blanket spread to all clients. I don’t participate in any huge servers because notification suppression sucks in Discord. The servers I do use are mostly sub 50 users, and as such don’t consume anywhere near as many resources as some of these mega servers out there.

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amphy 11 points 3 years ago

for real! I have a lower tier of nitro but the phrasing around all the higher-tier stuff says "try nitro :)" as if they don't already have their pound of flesh.

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iAmTheTot 5 points 3 years ago

notification suppression sucks in Discord

How so? I'm part of several large servers and they're all no notifications.

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BedSharkPal 9 points 3 years ago

It's so sad when apps stray from their lane and just become bloated messes. I'm looking at you too Postman...

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swnt 4 points 3 years ago

Entshittification just like tiktok, Reddit, YouTube etc.

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ngmi 0 points 3 years ago

also, Discord is basically owned by china

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FIST_FILLET 2 points 3 years ago

data breach

had heard absolutely 0 about this. thank fuck i wasn't impacted, brb gonna go change my discord email to a burner alias from simplelogin

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catuprisingsociety 1 point 3 years ago

There was a data breach? I guess they've done a good job of keeping it relatively quiet, I haven't heard anything about it

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Itty53 30 points 3 years ago

Tech startups of all kinds are being devalued the last 12 months. The tech sector was always heavily based in speculation and so as the markets recoil, the tech sector was going to feel it the hardest. People have been predicting that for years, literally.

The reddit devaluation falls in line with all that, not really the migration at all. Guys I hate to be the bearer of bad news but Fidelity's valuation experts don't give one shit about the happiness of the users, and only give half a shit about the number of them -- which, that number comes from reddit themselves on a "trust me bro" basis, like the user counts of any service. Let me even go one step further: the louder you complain about reddit, the more important you make reddit look, the more valuable you make reddit to investors. You have to re-frame your thinking when considering markets like this: users are not customers, they're products. "Look at the reaction of all those users" is what this migration boils down to, to those valuation experts.

On the exact same note you can bet on the rising popularity of any given celebrity by the number of their detractors. See a new starlet getting hated on by everyone on Twitter? They're going to sell more albums because of it. Every time.

Edit: Just like the trolls, your best bet to change the landscape of social media is to ignore the bad actors, including the social medias themselves. Don't engage with them and don't advertise for them by talking about them. Kbin's second largest magazine is RedditMigration. You're defining this place by the continued existence of reddit. Guys: Move. On. Let it die.

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Froyn 2 points 3 years ago

What did Kevin Smith do??

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Itty53 2 points 3 years ago

Nothing. But Weinstein produced all his movies, and Weinstein makes money every time they stream. He owns the IP, not Smith. And more are in the works. All the while Smith is downplaying his association with the guy. That kind of thing happens all over. It's just people making opportunity out of catastrophe, a very time honored tradition in human society. The fact is Smith cares more about continuing to make his money playing the same character he has since the 90s - despite a sick, disgusting rapist profiting from it every time - shows just how out of touch with the way businesses and money works that most people are. When he goes on stage and calls Weinstein a rapist gargoyle and nods along with the crowd, keep all that in mind. He's still actively working to earn that gargoyle money because it earns Kevin Smith a lot of money as well.

We like to think we're the ones in touch with reality, but realities aren't mutually exclusive. When we say wealthy people live in a "different reality" we're not saying they live in something that isn't reality. It is. For them. Not us. And understanding that is key to empowering us to change those realities.

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Froyn 2 points 3 years ago

So any Miramax film made during Weinstein's tenure should be shunned. Got it.
https://en.wikipedia.org/... -- So you know what all you're stating, he's every film they've been involved in.
Any time Weinstein's name shows up in a credit on a movie/tv, he gets a residual. His are probably forced to go to his victim fund. Smith is donating his residuals from that era to "Women in Film", voluntarily.

Miramax and Weinstein broke up BTW. Weinstein only holds the rights to Dogma, Miramax still owns the rest. Smiths' current production company is Lionsgate. While Lionsgate's subsidiary Spyglass bought most of the Weinstein Company catalog, they are not owned/operated by Weinstein.

People are multi-faceted. I believe Smith when he said he "didn't know THAT person" when speaking of Harvey. Smith probably viewed him the same way you would a priest. I'm certain that pedophile priests aren't acting all pedophily during Sunday Services. Again, you're logic is that we should burn down the church because a priest couldn't stop being hands-on with the altar boys.
Harvey Weinstein didn't create the characters or write the script. He didn't direct the movies. He wrote numbers and signed the check.

Show me anything stating that Weinstein owns more than Dogma.

Miramax produced the following:
October 11, 2002 Pokémon 4Ever

I guess that means that Ash needs to be held to account for Weinstein's transgressions, right?

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Sir_Kevin 1 point 3 years ago

No doubt Smith is locked into some bullshit contract. I'm sure he would not deal with the man if possible.

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chanunnaki 33 points 3 years ago

It’s still worth 5.5$b too much

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Holos620 33 points 3 years ago

Reddit has very little intrinsic value. Its value comes from its userbase and isn't Reddit's to own.

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Chadarius 6 points 3 years ago

Reddit is worth about as much as Digg or Slashdot etc... It won't be long for this world and will be just another also ran.

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Guster 5 points 3 years ago

How do they plan on making money?Ads lol?

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FourPacketsOfPeanuts 10 points 3 years ago

Look how shit Facebook is and it makes money. People that are happy to be spammed with ads while they scroll through low effort crap and influencer garbage sadly greatly outnumber everyone else. It's why profit seeking in social media always spoils everything.

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whatsarefoogee 3 points 3 years ago

Facebook can make so much from ads because they can be targeted to a scary degree because of the ocean of personal information Facebook collects.

Reddit doesnt even hold a candle to it when it comes to ad targeting. And their site and userbase is just not built around gathering personal information. Most people are either anonymous or pseudonymous.

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xaxl 1 point 3 years ago

Ad targeting isnt the way I feel most big players on Reddit do it now anyway. You pay people or a third party to make positive posts and comments about the stuff you're trying to flog instead. Reddit is rife with paid shills and fake bullshit now.

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Guster 2 points 3 years ago

Facebook is and has been on a decline though, so there is at least some justice

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UnfortunateShort 1 point 3 years ago

Facebook is still absolutely massive tho. I don't know exactly how massive anymore, but for sure multiple times bigger than Reddit

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zav 24 points 3 years ago

Reddit was valued at 10B? 🤣

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Tolstoshev 3 points 3 years ago

Because startup valuation is based on the last funding round, which was to the tune of $1.1B.

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darkstar 1 point 3 years ago

Right? How??

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x4740N 23 points 3 years ago

Very good

Hey spez fuck you

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Ertebolle 18 points 3 years ago

I still have 14,000 free coins in my account - maybe soon the valuation will drop low enough that I can buy the company with them, like in that Star Trek TNG episode where Data wins so much money that he buys the casino.

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arcrust 16 points 3 years ago

Oh no. I wonder what happened /s

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blade85 16 points 3 years ago

Still a crazy valuation, but oh well the migration has only just started.

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ohlaph 1 point 3 years ago

I'm guessing it's the potential at the moment. It has some of the highest traffic on the internet.

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Ezee 16 points 3 years ago

Just wait until the real migration happens. Reddit just committed suicide like Digg

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rockyrikoko 2 points 3 years ago

We need a /c/winstupidprizes community so when Reddit fails we can post about it and all smile while we puff out our noses

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UnfortunateShort 16 points 3 years ago

No way Reddit is worth 5B. How much money do they even make?

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Buelldozer 9 points 3 years ago

According to their CEO Reddit olis not profitable...so none!

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ugh 5 points 3 years ago

I still can't get over the fact that the CEO said that reddit is not profitable right before he plans to make the company public. Who is going to invest in a company that isn't turning a profit after almost 2 decades??

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Pieisawesome 4 points 3 years ago

They are not CURRENTLY profitable. Not they they have never made a profit.

They went on a hiring spree with VC money and now have 3k employees.

Spez has them all working on chat, tiktokification, etc.

If he cut headcount and kill the features no one wanted, they would likely be in the black

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ghariksforge 16 points 3 years ago

thanks to u/spez and his brilliant leadership!

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gillrmn 14 points 3 years ago

I doubt it is related to migration. It is too soon to have any data on that affect and by numbers it is not much of affect either. The only cost factor of migration that can be done before next quarter release would be increased costs in future dur to moderation, but even that would be very subjective. This is probably due to increased interest rate scenario as feds have said they will bring inflation to 2% so there will be more increase. Hence lowering of cost and spend by companies on advertising and marketing.

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shoelace 13 points 3 years ago

It's not related to the migration. The article said the lower valuation is as of May 31, before all the backlash on reddit began.

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milkytoast 14 points 3 years ago

it's almost like not listening to your users doesn't end well

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Jaysyn 4 points 3 years ago

This happened before the current kerfluffle.

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ANuStart 3 points 3 years ago

4.5 billion still sounds well to me...

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billiam0202 11 points 3 years ago

Rumor has it that Reddit wants to IPO at $15 billion. Hard to do that when you were worth $10 last year and are worth $4.5 this year.

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cantstopthesignal 1 point 3 years ago

There are plenty of rubes that have heard of reddit, unlike a lot of other IPOs. They will offer at an insane premium that the general public will buy into, then it will crash once the restricted period ends.

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billiam0202 3 points 3 years ago

I'm not a finance guy, so I really have no idea. But my gut tells me that if Fidelity values Reddit at $5 billion, other financial institutions probably peg it around the same amount. And the recent press around Reddit that people might have heard about is decidedly negative, so I don't know who would think it's worth that much. Also not to forget, lots of people knew about Facebook and it's stock didn't trade above it's IPO price until a year after it opened.

But again, I could be totally wrong. As H. L. Mencken wrote, "No one in this world, so far as I know ... has ever lost money by underestimating the intelligence of the great masses of the plain people."

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milkytoast 7 points 3 years ago

wee bit worse than 10b

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Poppamunz 2 points 3 years ago

not if that's the amount you lost

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LynnTheChaoticWitch 4 points 3 years ago

A fifty percent drop isn’t a good sign

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G_Wash1776 12 points 3 years ago

😂😂😂 get fucked Spez

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Yokimari 12 points 3 years ago

Good

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Briguy24 6 points 3 years ago

Thoughts and prayers

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SustainedChaos 6 points 3 years ago

We did it, exxitors!

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yoyolll 5 points 3 years ago

Typo in the title - should be $5.5 billion, devalued by 45%.

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FIST_FILLET 4 points 3 years ago

good :) a very sincere "get fucked" goes out to every single person intentionally responsible for the investor-pandering at r*ddit! thinking of you during these troubled times. reaper, meet what has been sowed

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DannyMac 3 points 3 years ago

😆

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bionicjoey 3 points 3 years ago

It's almost like loudly announcing contempt for your userbase is not good for a website where virtually 100% of their value is derived from the loyalty of their users

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debounced 2 points 3 years ago

imma need about tree fiddy

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ruk_n_rul 2 points 3 years ago

stanks 📉

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Argyle13 2 points 3 years ago

Wow, shareholders are going to be mad at spez, really mad. If this keeps going on, they will ask for it's head sooner than later.

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