Reddit is facing a crisis both in its user base and its finances. After protests and backlashed ravaged the platform in the wake of Reddit opting to charge for access to its API, the company’s valuation has been sliced.
TechCrunch reports that the Blue Chip Growth Fund at Fidelity, a major financial services provider, has reduced its estimates of Reddit’s holdings following an already poor estimate earlier this spring. Fidelity now estimates that Reddit’s holdings could be around $US15.4 million as of May 31, which is down over 7% from the fund’s estimates of $US16.6 million from this past April. This new figure is is also a reported 45.4% slide since Reddit secured Series F funding in August 2021, when an asset manager acquired the platform’s shares for $US28.2 million.
Reddit did not immediately return Gizmodo’s request for comment on the valuation.
TechCrunch notes that the majority of Reddit’s turmoil in holdings occurred last year and this most recent valuation only accounts for the worth of the company’s holdings up to May 31. However, the company is currently dealing with the fallout of a massive protest that spanned the platform earlier this month — tendrils of which still remain.
In April, Reddit announced that it would be charging companies for access to its API. Redditors, not one to stand idly by while their home on the internet made sweeping changes to its digital infrastructure, banded together and decided to go on strike over the company’s decision — leading to hundreds of subreddits going private beginning on June 12 with an expiration date set for June 14.
However, Reddit CEO Steve Huffman played offence, calling moderators a “landed gentry” that was eroding their own communities, while telling NBC that he may allow ordinary users to vote out moderators, whereas the current policy only allows higher-ranking moderators or Reddit staff to remove the volunteers from the position. While most subreddits are no longer participating in the strike, Huffman’s comments emboldened some users and moderators to continue the demonstration and get creative with their tactics, including flooding some major subreddits with photos and videos of John Oliver.
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