If you are a certain kind of cynical, Reddit’s S-1 filing sets off alarm bells. There’s the mention of r/WallStreetBets. (Five mentions in total, actually.) There’s the stockpile it’s amassed of Bitcoin and Ethereum. And there’s the program to give certain power users the option of buying stock before it debuts on the public market.

The S-1 is a document filed with the US Securities and Exchange Commission before a company goes public. It discloses all sorts of things: revenue figures, risk factors, key data about the business. And it sends certain signals. In this case: I see some meme stock shit.

I can totally imagine corporate insiders figuring, well, Reddit is the place for meme stocks, so yolo, etc. Except here’s the thing: Redditors aren’t enthused about it.

“Short the shit out of it,” wrote one r/Wall StreetBets user. “They have not proven that this user base or data set can be monetized.”

And there was this person: “Loads puts into the put-cannon with malicious intent.” (For those not up on the parlance, they’re intending to bet the stock goes down. Given the use of “put-cannon,” I assume they’re betting heavily. I am trying to imagine a situation where one loads the put-cannon without malicious intent, but it hasn’t sprung to mind.)

Okay, but that’s just r/WallStreetBets! Surely there are other Reddit users who are more enthusiastic, right? On r/technology, the top comment on the IPO story is, “The beginning of the end.” There’s gloomy speculation about the measures management may take to make the company profitable — which subreddits might be banned, how much users might have to pay to post, a heavier ad load. And one user called the directed share program, which lets top users buy in early, “a scam. It’s just Reddit running the scam.” They are also mad that Aaron Swartz has been erased as a co-founder.

This isn’t just bellyaching. There are serious questions about Reddit as a business. Reddit isn’t profitable. Reddit has never been profitable. Reddit’s risk factors section of its IPO is, as Bloomberg Opinion’s Dave Lee points out, longer than Twitter’s and Facebook’s IPO risk factors combined.

That’s because Reddit is much more vulnerable to its users than other social media sites, as various Reddit rebellions have made clear. Its model of community moderation has upsides — it means that the 60,000 mods are more familiar with their community than contractors would be. But Reddit doesn’t pay them and thus will have a harder time controlling them.

If you squint, you can kind of see how Reddit is trying to ameliorate that risk by offering shares to power users. Because they’re shareholders, they’ll want to keep their own shares valuable. That means they’d be less likely to do things that would cut off advertising revenue, like abruptly shutting down a subreddit in protest.

“I think it’s pretty cool that Reddit is doing this IPO offer to their mods and users,” a Reddit user who asked me to identify him as Kevon tells me. “It’s a nice little thank you that actually may have some monetary value.”

Reddit’s directed shares program works like this: Qualified users — people with enough karma or who have spent enough time working as mods, basically — received an email from the company that asks them to provide certain personal information to pre-register for the program. After about three weeks, everyone who signed up will get an email telling them whether they qualified. (Depending on how many people sign up, there may be a waitlist.) The people who did qualify will get “further instructions,” though Reddit’s FAQ is not clear about what those instructions will entail.

Kevon’s considering buying shares in the Reddit program, and may buy more once it goes public, if he feels the stock is undervalued.

You can look at it, as Kevon does, as a nice thank you to people who’ve meaningfully contributed. But let’s say you’ve sunk hours of your life into being a Reddit mod, and you’ve bought shares. There’s a possibility you’ll lose money — and effectively pay for the privilege of content moderation. Fun!

The share program “seems like a gimmick to me honestly,” says Dan M., who also received the offer. After all, it’s not like the shares are being given away for free, he says.

All of the Redditors I spoke to for this story enthused about Reddit as a community. In an internet era of SEO garbage and social media engagement bait, it’s one of the bright spots. It’s a place where there are still enthusiasts and experts, where people can still learn things, says Dan. “While the rest of the internet is all a giant mess, Reddit still feels like a place where you can learn things and have fun,” says u/itsreallyreallytrue, who also received an invitation and is considering buying into the share program.

But a good community isn’t quite the same thing as a viable business. Despite having been founded in 2005, the S-1 notes that Reddit is “in the early stages of monetizing our business and there is no assurance we will be able to scale our business for future growth.” Most of Reddit’s revenue comes from advertising, but it hasn’t been very good at making money. That might be because of its laissez-faire approach to moderation; hate speech wasn’t banned from the site until 2020.

Plus, user engagement isn’t regular. Events such as the war in Ukraine and the release of the video game Elden Ring — these are Reddit’s own examples — lead to spikes in user engagement. And a lot of users are passive, not even logged in. So targeting is a little trickier than it might be on, say, Instagram.

“It’s Tumblr all over again,” says Dan, who isn’t buying shares. “Executives look at a highly engaged community and think ‘there’s gotta be a way to squeeze money out of this.’ But maybe there just isn’t.”

Sure, Reddit’s trying to diversify its revenue by selling its data to help train AI; I don’t think the timing of that Google deal, just days before the S-1 became public, was a coincidence.

Reddit has also tried monetizing through blockchain initiatives. It sold NFTs as another revenue source. (During the peak of NFT hype, some of these assets sold for millions — and now the majority of NFTs are “worthless.”) It also had to end the Community Points product, which was a disaster for many whose tokens suddenly had no value.

The forays into web3 — beyond the Bitcoin and Ethereum holdings, the value of which Reddit did not disclose in its S-1 — make me a little suspicious about the shares being offered to users. The Community Points were a gimmick; are the shares a gimmick, too?

We can lay the blame for these gimmicks on CEO Steve “u/spez” Huffman. They aren’t the only bizarre decisions he’s made. He’s said that the API price increase last year that led to user protests, for instance, was partly because “Elon Musk did it.” (How’s Twitter — sorry, I mean X — doing with advertisers, spez?) His PR tour during the Reddit rebellion was frankly disastrous.

And while Huffman now thinks that Reddit as a corpus of training data for AI is valuable, he let his board member Sam Altman siphon off Reddit data for free; Altman was, and still is, the CEO of OpenAI. Altman’s also Reddit’s third-largest shareholder and owns more than twice as many shares as Huffman. Altman was the CEO of Reddit for eight days.

In the S-1, Huffman is listed as a risk factor, but perhaps not properly. “Huffman is critical to the management of our company and instrumental in the development of our technology and our strategic direction” and thus hard to replace, the S-1 says. The actual risk factor is the number of people who think “fuck spez” is a great catchphrase, because his job depends more than any other social media CEO’s job on keeping the users happy.

Well, many of those users don’t seem very happy about the IPO and are expecting Huffman to run the site into the ground. “I don’t really see any good that can come from Reddit going public,” Dan M. told me. “Not to sound dramatic but it kinda feels like the final nail in Reddit’s coffin after years of degrading quality.”

Kevon, who told me he was thinking of investing, says he thinks Huffman was overpaid. (In the filing, Huffman is listed as making $193 million in 2023.) He was surprised Huffman made so much while the company was operating at a loss.

u/itsreallyreallytrue was more succinct. “Tech narcissist CEO vibes,” he said of Huffman. “Fuck Spez, Fuck Elon, Fuck Sam Altman.”