That's the $40bn question. Indeed, in the past we have poiinted out that the company had struggled to come up with a convincing business model.

But then came the AI wave, and with it an explosion in advertising revenue. Two weeks ago, the company took the market by surprise with half-year results that far exceeded consensus expectations.

Highly referenced by ChatGPT and others—according to several studies, even more so than Wikipedia—the platform's content is thus finding new life. This is a great move for Sam Altman, who held a 9% stake in Reddit at the time of the IPO.

Now on steroids, the company has doubled its revenue in eighteen months and tripled it in three years. Its operating profit has been in the black for two half-years, and the latest three-month accounts show a net profit of $89m and free cash flow of $111m.

However, this performance must be put into perspective. First, one-third of pre-tax profit is linked to the remuneration of the abundant cash reserves—$2bn and equivalents—since the IPO. Second, as usual, the reported free cash flow does not take into account the substantial stock option compensation, which reached $89m for the quarter.

The exercise price of the options is very low – much too low, according to MarketScreener analysts – and the dilution caused by the corresponding share issues is high. The volume of shares in circulation is up 57% compared with the same period last year.

Furthermore, over twelve months, total stock option compensation amounted to approximately $800m, i.e., more than half of the revenue—not profit—generated over the period.

It must be said that this case is somewhat reminiscent of the rather grim case of Snapchat. See Snap Inc.: Vampirization in good order.