Reddit Users Are Against Their IPO & Glassdoor is Outing Anonymous Posters

0:26Race the rudders! Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Reddit is going public, so we're about to find out whether the place you go to for washing machine reviews can make it on Wall Street. Then the tea you dropped about your last employer on Glassdoor? It might not be as anonymous as you think. It's Thursday, March 21st. Let's ride.

0:58If your favorite Morning Brew Daily segment is Stock of the Week, well, we have a new podcast that's entirely about stocks and investing. It's called After Earnings, and it'll feature interviews with executives who are leading the companies you buy and sell on your brokerage app. Real conversations about company strategy and financials that you won't find anywhere else. It's also hosted by two absolute killers, Austin Hankwitz and Katy Perry. No, not that one. Someone who knows a lot more about finance. Yeah, Austin and Katie are awesome. They recently talked with the CEO of Celsius, John Fieldley.

1:31This is a company that's been ripping. Its stock is up over 200 % over the last year. So who wouldn't want to get behind the scenes to talk to John? Honestly, I'm a little jealous of Austin and Katie because these are conversations I definitely want to have. But luckily, we get to sit back and enjoy the fruits of their labor. I'm super interested. But Toby, we talked to Zuck. That is true. That is true. So I'm not too jealous. But yes, definitely give After Earnings a listen. You can find it by heading to afterearnings.com or the show lives wherever you get your podcasts and on video. So Spotify, YouTube, Apple, wherever floats your boat.

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2:37But you're right, you're right, you're right. Knowing I have Factor in the fridge for a midday lunch without the hassle is awesome. I don't care if you love to cook. It's a really nice feeling to have. Whether you'd win chopped or you don't know a peeler from a can opener, head to factormeals.com slash morningbrew50. Then use code morningbrew50 to get 50 % off. That's factormeals.com slash morningbrew50 with code morningbrew50 to snag a 50 % discount. I'm Christian McCaffrey, pro running back. And Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the internet last year.

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3:32After a long two-year journey full of false starts and ugly IPO markets, Reddit is finally going public today. Reddit is old. It's been around 20 years at this point, but has been mostly overshadowed by its much larger and more lucrative big tech brethren. It's seeking to raise$748 million in its IPO, which would put its valuation in the$6.4 billion range. But that number could fluctuate wildly once it starts trading. The company is allocating about 8 % of its IPO shares to its most loyal users and moderators, who have accrued a certain amount of karma on the platform over the years. Those shares won't be subject to a lockup, though.

4:12So that means owners can sell them as soon as trading begins. And that's where the intrigue lies today. The process of Reddit going public has led to some friction with its user base as leadership has steered the company in a more investor-friendly direction. And Redditors could make their displeasure known by dumping the stock the first chance they get. I would be a little nervous as I was Reddit leadership today. Probably, but, you know, I would be excited, too. There's not that many of these Web 2.0 social media companies that are still around or at least big enough to go public. I mean, Vine is gone.

4:44MySpace, Tumblr. All these are much smaller companies than Reddit, which is also pretty small. But I'm giving Reddit a little golf clap for making it this far. It's not that easy to to survive in this in this doggy dog social media world. That said, it is much smaller than its other big the other ones that have survived when it has gone public. So Facebook went public in 2012 at$100 billion valuation. Snapchat in 2017 at a$24 billion valuation. And Twitter in 2013 at an$18 billion valuation. So compared to them, Reddit is small. But I think, so it's not a big IPO in terms of size, but it is a big IPO in terms of cultural salience.

5:23Reddit is one of the top 10 most visited websites in the world. Everyone knows it. They have a very active user base. and many of them also like to trade stocks, and have been known to move stocks in the past, obviously, with GameStop and AMC. So, I think this is a very closely watched IPO that a lot of people are paying attention to. Yeah, it definitely packs above its punch in terms of the influence it has versus how big it is. Part of the reason why it's not that big is because it's traditionally monetized via advertising, and it's not a very good advertising product. It hasn't innovated at this level that Meta has.

5:55It doesn't have nearly the scale that meta has at this point one thing that on a longer term basis does have investors a little more excited about reddit is the fact that ai has kind of come along and reddit has a very good database for training that it can license out to other companies who want to train their generative ai models on reddit's uh treasure trove of content they've already struck a deal with Google. So that is something that has kind of buoyed this IPO and has given people a pause and say, wait a second, it's more than just kind of a second rate advertising company. It also has this whole AI Pandora's box.

6:33Right. So last year, Reddit made$800 million in revenue, which is kind of like what Facebook makes in a single day. So it's not a lot. But that Google deal that you mentioned is worth$60 million, which is not so insignificant compared to its overall revenue base. So if you're looking for perhaps a growth story for Reddit, and if you're bullish on this company, it's that maybe this new AI paradigm where AI companies like OpenAI, Microsoft, Google are going to need to sort of license this data now. They used to, quote unquote, steal it from content creators, but now they might have to pay for it if sort of the law states that.

7:09And Reddit could be sort of in prime position to be able to sell a lot of its data. And again, who knows whether that'll play with its cantankerous user base. So we can't talk about Reddit's cantankerous user base without also talking about Wall Street Bets, especially as we're talking about the IPO today, because we've seen the power of Wall Street Bets in the past. They were the ones who started and kicked off the meme stock craze that sent GameStop to the moon. We've seen AMC become a meme stock. And so what are they saying about Reddit's IPO? I was peering through it a little bit. One user said, Reddit about to break all records for speed running to a penny stock.

7:46I can't wait to short the blank out of this. This blank is going to absolutely plummet. I can't wait to see it. So again, this is a subreddit known for kind of their self-effacing humor, controversial humor at some point. So maybe this isn't actually representative of the wider Reddit user base as a whole. But that's why I say Reddit leadership's a little nervous because when you got your biggest stock-focused subreddit kind of saying, we're not bullish on this thing at all, it could lead to an ugly first day for Reddit. But maybe you want to be greedy when others are fearful. Last question on this topic.

8:20Do you think Reddit's going to become a meme stock? Yeah, that's the question. I don't think so. That's why I asked. I think it's too self-referential. That is against what Reddit does. It would be too on the nose for them. So I don't think it will actually happen. So I'm on record as saying, no, it will not become a meme stock in either direction. All right, well, we'll find out what happens today with Reddit's IPO. Moving on. If you're in the market for a new car in the next few years, chances are your options will be all electric or hybrid. That's not speculation. Those are the rules after the Biden administration unveiled major new regulations on auto emissions that will ensure that the majority of new cars and light trucks sold in the U.S.

8:59by 2032 will be EVs or hybrids. In terms of combating climate change, it's one of the most significant regulations in U.S. history, maybe second place to the Inflation Reduction Act of 2022. It is such a big deal because transportation is the largest single source of carbon emissions generated by the U.S. So if you can get a lot more electric vehicles on the road, you can prevent a lot of CO2 from getting into the atmosphere. The EPA says the rules will avoid more than 7 billion tons of carbon dioxide emissions over the next three decades. That's equivalent to removing a year's worth of all greenhouse gas emissions produced by the U.S.

9:37Yeah, if you pierce through the headlines that were coming out about these new regulations, it was that this is simultaneously the biggest attack on climate change that we've seen or biggest step forward towards addressing climate change that we've seen maybe second to inflation reduction at. But also, it's not as intense as it once was, because instead of just pushing us headfirst into EVs, it did open the door for hybrids to also play a role in kind of this greenification of the transportation industry. Because nearly a year ago, the EPA proposed this really, really fast ramp up into EVs. It would have said that two-thirds of all vehicles sold were electric by the end of this decade.

10:13Now it's pumped the brakes a little bit on that plan, and we're seeing more lenient measures. because a lot of automakers push back and say, listen, we cannot keep up with these tailpipe emissions. You're moving too fast. Can we have a more realistic timeline here? Right. The automakers did push back and they did work out a compromise because also, I mean, Evie, we've talked about this many times on this show, but the consumers just aren't there yet. I mean, automakers can make all the electric cars they want at this point. They've really ramped up production, but consumers just aren't making the leap to buy electric vehicles purely at this point.

10:46So what does this law sort of not mandate, but it hopes to ensure that in 2032, 56 percent of all new cars will be electric vehicles? Well, last year, only 7.6 percent of new U.S. car sales were EVs. So that gap is massive. And automakers are like, I don't think the consumer is there to start all buying electric vehicles for a variety of reasons. Yeah, at the end of the day, this is actually up to the consumers, because if the consumers don't buy the vehicles, then there won't be those vehicles on the road. I mean, just take the Ford F-150 Lightning. Remember, it launched through a lot of fanfare.

11:22It had this waiting list of 200 ,000 people who were waiting to buy one. Last year, it had sales of 24 ,000, which was much short of the 150 ,000 Ford expected to sell. So I think consumers will kind of lead the way with their wallets here. We do also have to mention that this is probably going to make its way to the Supreme Court because they're going to face immediate legal challenges, both from fossil fuel companies, a coalition of fossil fuel companies. Also, perhaps Republican attorneys, generals will take a stab at it. So even though these rules were passed and it was a big win for the Biden administration in the EPA, it's going to face some pushback and probably end up in the Supreme Court.

11:58Let's move on. Glassdoor is a unique part of the Internet. Its whole business is centered around the idea that it is a place where employees can go to leave anonymous reviews of their employers. It's a place to drop some tea on if a company's unlimited PTO really is unlimited or how optional their return to office plans actually are. But the whole thing falls apart when the anonymity part is stripped away, which is exactly what Glassdoor has been sneakily doing. It's been adding real names to user profiles, sometimes without users' consent. The issue stems back to last summer when Glassdoor acquired a company called Fishbowl that is kind of a professional networking app in the LinkedIn vein.

12:39Fishbowl requires you to verify your identity, which led Glassdoor to change their terms of service to also require verification. And verification and anonymity, they don't really mix very well. No, this prompted kind of a collective social media freakout when people saw that their names were attached to their profiles retroactively. And I can't think of anything scarier than leaving a bad review about your employer or past employers and seeing when you think it's anonymous and then seeing your name attached to it that you had no idea about. So you can imagine why people are like, delete Glassdoor.

13:14You know, look what's happening. They're putting your names on profiles. So there's definitely a lot of tension between users and Glassdoor because it's not really at this point fulfilling what its mission was. Yeah, Glassdoor is trying to do some PR here and saying real names and email addresses are used only for verification purposes. So it's not actually going to broadcast them to companies. But again, how confident would you feel to speak freely about an employer when your data and identity is sitting right there on your profile? And even if you check a box to remain anonymous, which you can do, there's always the fact that a leak could happen or getting hacked could happen.

13:49So we've seen these troves of identity data been hacked before. So that's part of the reason why people are feeling that kind of pit in their stomach to say, wait a second, I really don't want to be associated with some of the things I've said on Glassdoor before. Glassdoor does appear to be pivoting its business model a little bit, which does require verification. It wants to be maybe less of an anonymous review site and more of a social media network. And it's in that messy middle that we talk about a lot right now where it can't figure out exactly what it wants to be. because is it going to be an anonymous review site, which maybe is less of a good business because it is in the business of selling job postings.

14:25That's how it makes money. Or it wants to be after its acquisition of Fishbowl, it's kind of pivoting a little more to a social media site and social media sites want you to be verified. So they know you're not just complete spam or bots or anything like that. So it's in this gray area right now where it requires verification, but also wants to be anonymous. And that's just not sitting well with users. Yeah, absolutely. It's also an about-turn for Glassdoor because it's long been held up as kind of this paragon of First Amendment rights. So it's gone to court multiple times and held up against subpoenas from companies who say, like, hey, listen, we want to know who wrote these reviews about us.

14:58Crack in the crypto exchange had this big court case. And Glassdoor held very firm about this because, again, that's the whole purpose of it. But now it looks like that purpose has been shifted a little bit. And you're right. They've entered into this messy middle. So up next, pour yourself a cup of joe because we got Neil's numbers coming in hot right after this.

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16:16Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will make you feel as if entire Wikipedia pages were just uploaded into your brain. You won't be happy about my first number because you're just not happy in general. In a global ranking of happiness by Gallup, the U.S. fell out of the top 20 happiest countries for the first time since the survey began in 2012. The most striking takeaway from the data is the huge difference in happiness between young people and boomers. People age 60 and older in the U.S. reported high levels of well-being. And in this age group, the U.S.

16:51was in the top 10 countries for happiness. The picture looks a lot more gloomy when you talk about the use, though. People age 30 and below in the U.S. don't feel great about their lives, ranking 62nd globally in terms of happiness. This is a significant reversal from a decade ago when younger Americans were happier than people older than them. OK, that was a bit dreary. Let's end on a high note. The happiest country in the world, according to this rankings, is Finland, which took top honors for the seventh year in a row. Finland is undefeated in these happiness studies for sure. I think part of the issue is that young people are experiencing loneliness at higher rates than they have before.

17:30There was this Harvard survey conducted back in 2020 that found 61 % of adults from 18 to 25 reported feeling serious loneliness compared to 39 % for the general population. So I think the loneliness epidemic that we've spoken about on the show contributes to some of those happiness rankings. Totally. And you're probably wondering, how do you even measure whether someone or a country is happy? Here's the methodology. It's pretty interesting. They ask you to imagine a ladder and then think about your current life. The top rung is 10, and that represents the best possible life. And the bottom rung is zero, which represents the worst.

18:05And you just have to pick a number. And then they combine that number with other metrics like GDP per capita, life expectancy, freedom of the press, freedom of corruption, things like that to create a happiness score. And Finland is just the goat. Yeah. I kind of reject that sort of happiness monitoring, though, because I think that happiness is not an end state that you end up in. It's a process that you are striving towards. So happiness is in the striving, not actually the destination itself. So I don't know, because like if I I don't want to report a 10 on the ladder scale, because that means I'm done.

18:36Like I'm coasting it in for the rest of life. I want to be in that six to seven range where there's still better times ahead of me. So I don't know. I'd like to push back on Gallup's methodology here. Maybe climb a different sort of ladder. All right. My next number requires a choreographed dance and at least seven outfit changes because it's about how much wealthy Indians spend on their weddings. It's a lot. A report from Skiff found that 3.5 million couples tying the knot in India last year led to spending of$57 billion. Oh, shoot. Did I say last year? My bad. That$57 billion is just from weddings held on the 23 days between November 23rd and December 15th.

19:15Insane. These weddings have become an important source of revenue for luxury hotels trying to become the go-to spot for Indian nuptials. Marriott, for instance, hosted over 900 weddings in India in 2023, which contributed almost 10 % of its entire sales in the country. Toby, how do we get on the invite list? That is every time that I see a stat like this, that's all I want is to be invited to an Indian wedding over in India. Some of my friends have gone, and it's just the coolest thing ever. Like the outfits, the food, just the fact that it stretches on for multiple days. It seems like a lot cooler than Western weddings, if I have to be honest, but it definitely costs a pretty penny.

19:52Skift also estimated that the typical Indian wedding at an international destination costs$215 ,000. So Indian weddings do it big no matter if it's in their home country or international as well. And of course, I think the world kind of recognized this earlier this year when there was that pre-wedding bash for Anand Ambani, which was attended by Rihanna, Mark Zuckerberg, Bill Gates, and Bob Iger. And it wasn't even the wedding. Yeah, the party of the century wasn't even – it was the lead-up to the party of the century. All right, finally, the NCAA Men's Basketball Tournament, aka March Madness, starts today.

20:26But the only madness is thinking you have any shot of filling out a perfect bracket. The odds of a perfect bracket are 1 in 9.2 quintillion. And if that sounds like a lot, it is. There are only about 7.5 quintillion grains of sand on Earth. But that is a bit disingenuous, admittedly. The number is based on flipping a coin to determine each game. And you're smarter than that. If you know something about basketball, your odds increase to one in 120 billion. And if you know a lot about basketball, you could get in the range of one in 10 billion. So let me be clear. It's not happening. The furthest anyone's gotten in the Internet age of brackets is an Ohio man who correctly predicted the entire 2019 NCAA tournament into the Sweet 16.

21:09That's 49 correct games. But eventually he lost. And so will you. Dang, that's quite the note to end on. I cannot guarantee that you will get a perfect bracket, but I do have some statistics that will help you potentially choose the champion, which is one of the biggest parts of winning your March Madness pools. So here are some fast facts about March Madness that will help you win your pool. No team west of Texas has won since 1997. So sorry to St. Mary's, Rick and Zagher, anyone on the West Coast. No seed higher than eight has made the championship game. So again, the Drakes, the Duquesnes of the world's not going to win the national championship.

21:46Unfortunately, the last 19 champions have been ranked in the top 12 of the week six AP poll. So go back to week six. Look at that top 12. Your champion is going to be located in them. And then also there's these offensive and defensive advanced stats that measure not only points per game, but offensive and defensive efficiency, which adjusts for things like pace, turnover volume, stuff like that. It's called Ken Palm. It's kind of become the stat du jour of people very tuned into college basketball. Anyways, 18 of the last 21 champs have Ken Palm adjusted offensive efficiency in the top 20 and defensive in the top 40.

22:20And finally, 20 of the last 21 champs have been top three in Ken Palm or UConn. So all of that, combine all of that, your champion will be one of Purdue, Houston, or UConn. It's not the sexiest thing. They're all number one seeds, but based off all those stats, your champion will come from those three. All right. I'm not listening to all that, but happy for you. We're sorry that happened. Thank you, Neil. All right. Let's move on. Hewlett Packard is trying to modernize its business by making you pay a subscription to get access to its printers. Sounds like a joke, but HB is very serious. For$6.99 a month, they'll send a printer to you and give you the option to print 20 pages per month with ink and technical support included.

23:03If that's not enough to satisfy your printing needs, you can go as high as$35.99 for 700 pages a month. I'm trying to wrap my head around this one, Neil. Obviously, we live in a more digital age where printing is not all that necessary anymore. The one HP rep told Bloomberg, actually, there's a ton of use cases that come up, citing scrapbooking and children's school projects. And HP thinks that selling subscriptions to its hardware might be a more enticing way to build a relationship with customers who have grown to kind of hate dealing with the technical issues and the cost of ink over the years.