r/stocks
Reddit is very likely manipulating its Revenue Numbers
Author alleges Reddit manipulates revenue data to show artificially low volatility post-IPO, citing historical inconsistencies and CEO's past ethical issues.
- Post-IPO quarterly revenue growth volatility is statistically anomalous compared to pre-IPO yearly data, suggesting potential smoothing or manipulation.
- The consistency of ~70% YoY growth over seven quarters is deemed unrealistic for a business of this nature without artificial intervention.
- CEO Steve Huffman's history of unethical behavior (fake accounts, editing comments) undermines trust in the company's financial reporting integrity.
Between 2015 and 2023, Reddit had yearly revenue growth rates of roughly 88, 67, 100, 60, 50, 57, 143, 47, and 20 percent. This averages out to 70%, with completely normal volatility.
However, ever since they IPO'ed, that volatility has vanished. The quarterly year-over-year growth rate has been sterilized into a very narrow range around 70%. Reported quarterly volatility in growth is now allegedly significantly lower than the yearly volatility before the IPO. That, of course, is complete BS.
https://imgur.com/a/reddit-faking-no-more-volatility-revenue-growth-6Rp8Feb
This is what they have reported over the last seven quarters: 69, 69, 68, 78, 62, 62, and 67 percent YoY revenue growth. There is basically a zero percent chance that revenue would grow at this high a rate with this low of a volatility over 7 quarters. It has never happened anywhere else, not even close, including Reddit pre-IPO. They are in all likelihood manipulating the numbers, smoothing them out to fake a low-volatility, high-growth business.
It would also not be the first time Huffman has been caught cheating: in 2005, he created fake accounts; in 2016, he edited user comments; and in 2023, he lied about being blackmailed by the Apollo app developer.
You don't cook the books of a 30 billion dollar public company as easily as you edit a few posts as an admin.
This is fake news and I’m investing in Reddit. I’m betting it will only get bigger. Thanks for listening.
did you huff something, man?
Before Reddit ipo-ed, it was mostly an atm machine for execs. Now they have to fully focus on shareholder value and kept improving the ad business. Hence the revenue growth and stabilization.
Plus what a reliable source u have
He lied about being?
Also there are plenty of bots in the comments everywhere. Super noticeable gpt style responses .