Correct me if I'm wrong, but reddit is trying to do an IPO soon and this guy is projecting a lot of uncertainty about their business. He's offering to stop that if he gets paid off.

(for the record, I almost feel like he's in the right to do so. Still weird how this is being presented)

He jokingly offered that the whole situation can easily be solved — he shuts down/sells his app for half of the “lost” money reddit would make were Apollo’s users using the official app. Win-win for both sides. The other side of the phone call misinterpreted a “quiet down” expression, which was used for the API calls from Apollo servers (serving which costs Reddit money).

It seems too ambiguous to judge, honestly.

It seems like he was trying to invoke a sort of ironic use of quiet down to ease the situation, but ironic extortion is still extortion.

It's not extortion -- the whole point of the joke is that the pricing is so ridiculous that it would be a massive discount to Reddit if they just bought his app for $10 million.

the first part yes, the second part would be more like causing a public nuisance.

The implication is they buy the app and do what they like with it.

The alternative is that he has no choice but to shut down the app, given that they've announced what the price will be 30 days before it's introduction. Even if he'd said nothing there would have been a shitstorm; the timing would be obvious.

Reasonable notice of the price increase would have given 3rd party developers time to monetise and meet the new costs. A more reasonable price could have been borne by 3rd party apps with very little fuss. Making API access a premium Reddit feature would have put even more money in Reddit's pocket. Buying out the 3rd party apps would have been unpopular but would give Reddit the appearance of being less incompetent, underhanded, and duplicitous.

Instead, Reddit made literally the worst possible choice in this situation: alienating their users and the moderators that do most of the work on the platform.