It sounds a lot like a version of "pump and dump", which the SEC puts in the securities fraud category.

Its fine (well to be more specific- legal) to have fake users/content on your privately owned website, but it will be fraud if they include those users and posts in their metrics provided to investors. In the US anyway.

If the owner of the site was in on it (adding fake users/content) and passed it off to investors as natural, I can see that as being fraudulent, but what if the owner legitimately wasn't in on it, as could easily be the case if the "fake" users/content were created by third parties for unrelated reasons and not detected by the owner? Indeed, the concept of using a throwaway per submission in certain circumstances is a well-known part of the culture, which is why I put "fake" in quotation marks -- accounts are only fake if someone erroneously assumes the ratio of humans:accounts would be anywhere near 1:1.

And if the latter is not fraud but legitimate usage of the site, then it seems like there could be a huge gray area of plausible deniability that the owner was simply using the site the same way that anyone else could (albeit with a streamlined interface).

Faking activity to bootstrap real activity is probably fine. To expand into international markets, they need to present existing activity to draw and retain users. But I don't see a problem with this.

I don't think many people have much of an issue with it at the base level. Creating threads to drive engagement on hypothetical issues, made up humor/ragebait stories, etc. are pretty harmless in itself.

But when the actions are done in an attempt to trick individuals weighing financial incentives? That becomes much more murky. Had they bootstrapped these communities prior to the IPO filing? Fine. After the spotlight is on them to prove organic growth for the IPO? Murky.

Fair point. I didn't realize they already filed for IPO.

> made up [...] ragebait stories [...] are pretty harmless in itself.

Strong disagree, reading such things habitually is corrosive to the mind and turns people bitter. For reddit to recommend and promote ragebait subreddits to their user is deeply unethical. And to create fraudulent ragebait content, to make people vicariously mad about something that didn't even happen, is evil on par with being a tobacco advertiser.