That being said, this whole debacle is making Reddit stocks tastier for risk-tolerant investors; The more the valuation plummets now, the more potential it has to bounce back.
Most likely long-term outcome of this whole thing IMO: The valuation continues to go down for the next several months as the fallout from this API decision and subsequent protests drives away more users and advertisers and generates more bad press. Eventually the internet forgets about it (minus the “power users” who have already migrated elsewhere), and Reddit will wait until well after that for their IPO. Whether before or after the IPO, u/Spez will be replaced as CEO. While that likely won’t change much, it’ll be a symbolic move to say “we listened to the users/investors.” After which, valuation will quickly recover to pre-debacle levels.
Only question from there is whether the loss of the “power users” was enough to send the site on a permanent downward trajectory. My guess is probably not; plenty of people left to fill that void. Reddit will continue on, as a slightly shitier, more investor-friendly site.
I honestly got the impression that the u/Spez AMA was intentionally shitty, as an attempt to scapegoat him. I cannot fathom how a multi billion dollar company could allow that to happen unintentionally. It was comically bad. They’re just waiting until after the API change goes live to actually can him, so they don’t have to change the decision.