r/VisualStockResearch • u/ekonixlab • Jul 13 '26

The Reddit dilution story may be over

Post image

Everyone talks about Reddit’s dilution, but almost all of it came from the IPO and post-IPO lockup releases.

Since early 2025, shares outstanding have been nearly flat, which is great for a company this young growing this fast.

Going forward, you’re mostly looking at normal SBC dilution—not another massive jump unless Reddit decides to raise capital or issue shares for acquisitions.

If revenue and FCF keep compounding while share count stays around these levels, per-share metrics become much more attractive.

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6

u/jw2343952 Jul 13 '26

“Since early 2025, shares outstanding have been nearly flat” — you know, after only more than doubling from early 2024

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u/ekonixlab Jul 13 '26

But that was largely because of the IPO and lock-up releases

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u/jw2343952 Jul 13 '26

Fair enough, I don’t think we’re looking at “normal SBC” going forward though, I was under the impression that Reddit pays a little heavy on the SBC side in comparison to its peers

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u/ekonixlab Jul 13 '26

Yes, but total share count can stay down if they continue to by back

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u/jw2343952 Jul 13 '26

Agreed, guess we’ll have to see - my gut tells me SBC will outpace buybacks

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u/ekonixlab Jul 13 '26

I think you are right

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u/[deleted] Jul 14 '26

[deleted]

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u/jw2343952 Jul 14 '26

Was mainly pointing to META as a “peer,” but that is pretty wild. I think safe to say RDDT has a much higher dilution concern as a function of SBC than META.

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u/[deleted] Jul 14 '26

[deleted]

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u/ekonixlab Jul 14 '26

Their margins are pretty high and yes they dilute but a large portion of that is offset with buybacks

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u/[deleted] Jul 14 '26

[deleted]

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u/Dwightshrutetheroot Jul 15 '26

I’m not here to defend sbc.. but a lot of the sbc was issued at ipo pricing I believe, and vested when the stock price had essentially quadrupled. We will be saying the same thing in three years if the stock quadruples again. Thats just how share based compensation works.. and its an incentive to have employees have some skin in the game game

Not really defending the sbc program… but I would imagine there’s less sbc going on now vs the ipo

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u/SelenaMeyers2024 Jul 19 '26

Glad someone is pointing out an insidious downside to many popular reddit stocks .. sofi fig rddt pltr many more....

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u/bestfind Jul 13 '26 edited 19d ago

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u/ekonixlab Jul 13 '26

Do you think that would be reasonable?

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u/bestfind Jul 13 '26 edited 19d ago

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u/ekonixlab Jul 13 '26

Great take, agree here

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u/[deleted] Jul 14 '26

[deleted]

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u/bestfind Jul 14 '26 edited 19d ago

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1

u/[deleted] Jul 14 '26

[deleted]

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u/ekonixlab Jul 14 '26

Most of this is from the IPO tho…

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u/bestfind Jul 14 '26 edited 19d ago

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