Reddit is ready for IPO, its CEO was paid 193 M last year

That's pretty easy. I'd recommend the executive management be let go and replaced with people that can actually manage costs properly.

It's a community website for God's sake... so the content for that site is generated by end users and most of the moderation is done by volunteers. The site generated over $800 million in revenue last year and it still couldn't make a profit, and that's with free content and free moderation labor to sanitize the free content. Considering that all the content work has already been done at no cost, the company's staff only has three core responsibilities.

1. Keep the site up and running.
2. Sell ads against the free moderated content.
3. Manage volunteer moderators and handle any major issues they are unable to resolve on their own.

That's it. That's all they have to do to run a profitable business.

But the question is.... where are all the costs coming from that continually bury them in the red zone? I'll tell you where. Exorbitant employee compensation and overstaffing. They are spending $1.25 to generate $1.00 in revenue. Realistically, they should be spending 25 cents to generate $1.00. But they are so far away from that metric it's ridiculous. And do you think once Reddit goes public, their employee expenses are going to go down? Of course not. If anything, they will need more people to handle the regulatory requirements of being a public company. Last time I checked, they had 2,000 people on the payroll.

The core problem is that they have established a corporate culture of raising money to fund operations instead of actually running a profitable business. It's been going on for 19 years now so I doubt that is going to change anytime soon.

Remember, a successful business is offering a product or service that people want to buy, and then selling it to them at a price that is more than what you paid for it. Reddit has never done that in almost two decades.

So, my #1 recommendation would be to replace the current management with people who are skilled at running a profitable business and generating real shareholder value instead of the current team, which appears to think a successful company is one that persistently asks investors, both private and public, to fund a money-losing operation.

It all makes sense in retrospect. The founders started Reddit while in college, and they were able to secure funding within a short period of time. They were also able to persuade other heavy hitters to invest more on many occasions thereafter, with each round increasing the so-called "valuation" of the company. So the model of "just ask people to invest" despite any ability to obtain profitability is the only strategy they know, but it has always worked out for the executives so far to date, so they just keep doing it. I don't want to come across like the founders are malicious in any way. They aren't. They just started this funding merry-go-round from the beginning and the pressure from the early investors to generate a liquidity event is enormous, hence the IPO.

The logical and unfortunate conclusion to this saga is that unless they pull off a miracle of consistent profitability in the near future, the investors that were late to the party will eventually be left with something that has very little value, if any.