Reddit is a lemon.
"Some invitees say they’re worried about the company’s financial situation. Reddit recorded a net loss of $90.8 million last year, an improvement from 2022, when its deficit came it at $158.6 million. The company said in its prospectus that it’s racked up a cumulative loss of $716.6 million."
Reddit's CEO and COO made $193M and $93M in 2023 but their CFO "only" made $6.6M
So if you eliminate the CEO and COO, they have a profitable business. Given those two have tried to kill the community over and again, why keep them?
Stock issuance deducts from GAAP earnings. So yes, it sounds like they would be profitable excluding this issuance.
Imagine you own 1% of a business that nets $100/year in cashflow, so you're entitled to $1/year. But they give the employees of that business 2% (of total count) additional shares per year (and not you).
Are you making or losing money? Cash flow positive, negative earnings... loss of your equity exceeds your cashflow.
That's not how it works for this comp. It is the max total stock comp for a 10 years employment if every milestone is hit and reddit market cap goes up 300%.
My example was to refute the parent poster who implied, in a seemingly general sense, that stock issuance doesn't impact earnings, which is false.
As to the exact timing of the accounting treatment in this case, I'm not privy to that. The statement above was that the CEO was paid ~$193m in stock, which implies it was issued in that fiscal year. Maybe it was in this case, maybe it wasn't, but that doesn't change the underlying point.
Stock grants absolutely do adversely impact GAAP profitability. A company will dilute existing holders to issue RSUs or otherwise.
Reddit's CEO and COO made $193M and $93M in 2023 but their CFO "only" made $6.6M
So if you eliminate the CEO and COO, they have a profitable business. Given those two have tried to kill the community over and again, why keep them?