u/Navelabob

Obviously yes it can be tough to sit through, but it shouldn’t sway you to sell an investment just because a stock underperformed over a certain period. If the story is still in tact, the financials are strong, and management is properly executing then selling shouldn’t even be a thought, but buying more should be.

A few quick takes on management execution

1- unless the court cases aren’t settled by early 2027 I would expect those to happen before AI deal refresh so I can’t blame them for this.

2- Vollero needs to ramp up the buy back to at least 100m a quarter starting Q2. Q1 buyback was disgraceful full stop.

3- execution on the ads side of the business has been great and that’s where the big money is. Their model works , and now they’re investing talent and money into the content feed to increase engagement.

4- they’re already super profitable. They lost money in 2024, in 2025 they boasted around a 20% profit margin. Last quarter it was 31%. People underestimate just how well a business like this scales.

Don’t let Wall Street get your shares for cheap. What’s the lowest this stock could truly go. 5$ eps this year is the low estimate, and every time they post strong earnings the fair value keeps going up. Unless you believe the stock is trading above fair value today, the price action is no reason to sell. And if anyone does own RDDT that bought in the past that is considering selling for a loss, why do you believe Reddit is above fair value and what has changed in your thesis since your purchase? Thanks

So another post mentioned earlier and in the earnings call Vollero mentioned higher SBC cost in the next quarter due to grants needing to be renewed. Looking at last quarter, basic shares outstanding rose by 1.5m, however stock based expense was 78.7m. Looking at current prices SBC costed over 200m at current share prices if we wanted to offset that dilution. So the question is with upcoming refresh on grants,

1. How is the new underlying cost basis calculated? Is it just based off current market value on the day the grants are given?
2. Does anyone have any idea how many shares could potentially issued, and is it likely that even not accounting for share buyback dilution slows down since stock underlying grants are worth more thus they would have to issue less to employees for competitive market compensation?

So with 22% SBC growth from Q2 2025 (Vollero said expect SBC expense to rise about half as fast as revenue growth) we are looking at 116m for next quarter. If SBC share cost basis stay the same as this quarter (78.7m/1.5m=$52.47 per share) we are looking at around 2.2 million shares to be issued next quarter. At current market price this would cost 340m of cash to neutralize but obviously if the share cost basis is $60 per share for example and the same 116m SBC expense it would cost less than 300m, and if it’s all at current market value (which it won’t be) it would only cost 116m to neutralize it.

TLDR- does anyone know or have an idea when we can expect cost basis on the income statement to more accurately reflect current stock prices, and when it does is it likely total share count dilution goes down?

Last quarter only 5 million of the 1 billion (0.5%) allowed for share buybacks was used. I would have liked to see more but otherwise I think everyone would agreed it was a great Q1. Assuming the stock trades between 170 and 210 how many shares would you like to see repurchased next quarter? I would like to see around a million shares bought back