Reddit 2025 Share Based Compensation as % of Revenue

Reddit has by far the highest Share Based Compensation at Market Prices compared to Revenue at 82%, which is 4x of some of the worst offenders. This matters, as market prices are what we pay to buy the shares, and what the company pays to buyback now.

The book value of Share Based Compensation used by executives is based on outdated 2023 share prices (about $25) and has nothing to do with the actual costs of SBC.

If you get a share worth $200 you get $200 an not $25.

"How much can we get away with." That's the spirit of the current Reddit SBC scheme. Nothing else matters. All the growth, meaningless at this point: It evaporates into this scheme.

For years to come, the SBC (currently 1.8bn) will eat all Free Cash Flow (700m) and thensome.

For a decade to come, annual dilution will continue to run at 5% or more ("Evergreen").

And Reddit is not a startup that needs a shot in the arm. It's a highly profitable, established company with great margins and hundreds of millions of users all over the world.

The Stock Market has seen enough. About 2 weeks ago it determined that the great Reddit Business is not attached to the Reddit Stock.

and now the fun part: its as easy as it gets to fix it. to get the stock out of the markets chokehold, cut the executives sbc in half immediately and signal willingness to draft a sensible long-term program. please dont copy other companies this time, they all suck. Create something new. Be better !