The key to analyzing these seemingly illogical moves is to think “How does reddit the company benefit from this?” Why reddit the company and not just Steve Huffman? Because reddit’s board did two things: They made Huffman the CEO (well, two of them did, one joined the board in 2019), with full knowledge of who he is (protip: he’s always been a twerpy little tyrant turd), and he’s still CEO today.
Those board members are:
Robert A Sauerberg Jr “Bob” Nast Conde Inc. (Was CEO of Conde Nast)
Patricia D Fili-Krushel “Pat” current CEO of Center For Talent Innovation Inc., also sits on boards for Dollar General and Chipotle.
David C Habiger “Dave” President and CEO of JD Power.
These are all career businesspeople. They are surely steeped in a responsibility to shareholder value. Reddit is looking towards IPO, maybe later this year.
Since reddit does not currently have shareholders, neither of those mechanisms applies. The board, and the executive committee (empowered by the board and led by Steve Huffman), can essentially do anything they want, with impunity. I believe the end goal of these actions is to hasten the IPO, because (I assume) all of these people have big stock grants on the table when the IPO happens.
And it doesn’t matter what happens to the stock price at IPO; no matter what, all of these people (and surely others) get giant piles of free money. Sure, they’d like that free money to be in as large a pile as possible, but a smaller pile is infinitely better than no pile. There’s enough momentum behind reddit at this point that they can alienate a huge proportion of the users and the IPO will still happen.
Taking these actions now enables reddit the company to have greater control over its product, reddit the site. That is stability. Doesn’t matter whether the product is “better” or “worse.” If the product has a more predictable path forward, it will be more valuable to potential shareholders.
What’s happening right now is identification of what reddit users are more likely to make the site less predictable. Subreddit mods, especially those of large subs, have a lot of opportunity to make their subs, and by extension, reddit the site, less predictable. So out they go, replaced by people who will play ball.
Control generates predictability, predictability generates increased share value at IPO, IPO puts money in pockets. It makes total sense that the board would want a control freak as CEO, and that that CEO would exert that kind of freakish control. Yes, that will disenfranchise a lot of reddit users, some of them with a lot of history at reddit. Those are not the users that reddit the company wants. Those users are the ones who make the site less predictable; reddit the company wants those users to leave.
The key to analyzing these seemingly illogical moves is to think “How does reddit the company benefit from this?” Why reddit the company and not just Steve Huffman? Because reddit’s board did two things: They made Huffman the CEO (well, two of them did, one joined the board in 2019), with full knowledge of who he is (protip: he’s always been a twerpy little tyrant turd), and he’s still CEO today.
Those board members are:
These are all career businesspeople. They are surely steeped in a responsibility to shareholder value. Reddit is looking towards IPO, maybe later this year.
“Courts have traditionally ruled that a corporate board of directors has responsibility to the corporation, not individual shareholders. However, this distinction is not always significant. Directors are made most responsive through two mechanisms: proxy votes at shareholder meetings and movements in the price of company stock. If a single director misbehaves or underperforms, they may be voted out of the job. If shareholders are truly dissatisfied, they can sell their stock and drive down the price.”
Since reddit does not currently have shareholders, neither of those mechanisms applies. The board, and the executive committee (empowered by the board and led by Steve Huffman), can essentially do anything they want, with impunity. I believe the end goal of these actions is to hasten the IPO, because (I assume) all of these people have big stock grants on the table when the IPO happens.
And it doesn’t matter what happens to the stock price at IPO; no matter what, all of these people (and surely others) get giant piles of free money. Sure, they’d like that free money to be in as large a pile as possible, but a smaller pile is infinitely better than no pile. There’s enough momentum behind reddit at this point that they can alienate a huge proportion of the users and the IPO will still happen.
Taking these actions now enables reddit the company to have greater control over its product, reddit the site. That is stability. Doesn’t matter whether the product is “better” or “worse.” If the product has a more predictable path forward, it will be more valuable to potential shareholders.
What’s happening right now is identification of what reddit users are more likely to make the site less predictable. Subreddit mods, especially those of large subs, have a lot of opportunity to make their subs, and by extension, reddit the site, less predictable. So out they go, replaced by people who will play ball.
Control generates predictability, predictability generates increased share value at IPO, IPO puts money in pockets. It makes total sense that the board would want a control freak as CEO, and that that CEO would exert that kind of freakish control. Yes, that will disenfranchise a lot of reddit users, some of them with a lot of history at reddit. Those are not the users that reddit the company wants. Those users are the ones who make the site less predictable; reddit the company wants those users to leave.
Everything makes sense.