Reddit is antsy to effectuate their exit strategy.
Or to put it more simply: everyone with a stake in Reddit, from pigboy Huffman, to institutional investors like Fidelity, to employees who earned equity is eager for Reddit to have their IPO so they can offload their shares on the public stock market.
Their valuation will be an important factor, if not the most important factor, that will determine for which price those stocks will initially be put on the market.
So while slashing the valuation in half will not directly lose them money, it could translate into the initial stock price being half of what they anticipated, causing them to get half of what they would’ve gotten had the valuation not be slashed in half.
There is no way in hell that people with equity in Reddit are not pissed about the slashing of the valuation, since they now anticipate getting a haircut as much as half of what they initially expected to get.
It’s not out of solidarity, advertisers are worried they’ll turn into lightning rods: https://www.adweek.com/social-marketing/ripples-through-reddit-as-advertisers-weather-moderators-strike/