Investors care about the potential for future growth and thus future increased profits. They don’t give a shit about what a company is doing today, except to the extent it is predictive of the future. Investors look at this and see lots of activity of users who actively hate the company, that’s not future growth.
To take an unfortunate example, imagine if Bud Light had a bump in sales because a bunch of right wing lunatics were buying extra just so they could make videos of them throwing away, shooting, blowing up, or otherwise destroying the beer while vowing never to drink it again. Does an investor look at that bump in sales and say “oh neat, look how well Bud Light is doing, I should invest!” or do they say “A lot of Bud Light’s core consumer base is pissed as hell and probably not going to be buying this product in the future, there is limited potential for future growth, I’m out”?
Yeah, but in exchange for a brief flurry of engagement they have to put up with another wave of articles about angry reddit user protests:
https://techcrunch.com/2023/07/20/redditors-are-already-using-r-place-to-address-api-controversy/
“Oh no, anyways…”
Says the Reddit execs as they show off their numbers to VCs as they prepare for their IPO
People hate CEOs but can be so dumb…
Investors care about the potential for future growth and thus future increased profits. They don’t give a shit about what a company is doing today, except to the extent it is predictive of the future. Investors look at this and see lots of activity of users who actively hate the company, that’s not future growth.
To take an unfortunate example, imagine if Bud Light had a bump in sales because a bunch of right wing lunatics were buying extra just so they could make videos of them throwing away, shooting, blowing up, or otherwise destroying the beer while vowing never to drink it again. Does an investor look at that bump in sales and say “oh neat, look how well Bud Light is doing, I should invest!” or do they say “A lot of Bud Light’s core consumer base is pissed as hell and probably not going to be buying this product in the future, there is limited potential for future growth, I’m out”?