2023 was challenging, to put it mildly. My last article, "Shut the F*ck Up," likely conveyed my newfound transparency when it comes to our challenges. Late in 2022, despite a reasonable market capitalization, we were trading under $1.00. We faced the risk of immediate value deflation if we were to reverse split, a frequent issue in the microcap sector where market caps often hover around $2 million-$3 million. An outdated rule about maintaining a trading price above a dollar nearly bankrupted us.
Our financials back in the second quarter of 2022 showed substantial growth and efficiencies, marking our 25th quarterly public filing. We observed a 45% increase in gross revenues, a 67% rise in net revenues, and a 10% reduction in operating expenses year-over-year. Our path towards positive EBITDA was clear, focusing on optimizing cash flow, minimizing our burn rate, and enhancing our Return on Ad Spend (ROAS).
Then, as in 2008, the capital markets ground to a halt towards the end of 2022. Our strategy shifted from sustainable growth to mere survival. The delisting notice we received in the fourth quarter of 2022 underscored this reality.
We chose our own fate: we chose to transition to the OTCQB without a reverse split. It was a calculated decision made to mitigate the damage caused by systemic challenges in small and microcap sectors. This move, aimed at preserving Creatd's long-term vitality, involved a strategic decision and approach to our Shareholder meeting early in 2023. We preserved the ability to split in the future, though we didn’t exercise it then. We secured that ability without impacting the total authorized shares, allowing us to finance through restricted offerings. This approach was designed to ward off short-term financiers and nefarious external entities that devalue companies.
The aftermath of our refusal to reverse split led to our stock plummeting to half a cent by the end of 2023, carrying on a period of continuous value erosion lasting 18 months. A staggering 500-600 million shares were traded, with nearly 200 million in the last few months. This trading volume suggests an irrational mix of legitimate and what I believe to be naked shorting pressures by market makers who are simply hedge funds abusing the capital markets. We are diligently building a case and working with partners for legislative change.
In the future, when we reverse split, it will be from a position of balance sheet strength, in addition to our survival. I do not fear a reverse, I fear not doing a reverse for the wrong reasons.
I do not fear a reverse, I fear not doing a reverse for the wrong reasons.
Today, Creatd Inc. is divesting private interests in its major business divisions: Creatd Ventures, Vocal Inc., and OG Collection Inc., reducing ownership to minority positions. This move streamlines Creatd's operational expenses and strengthens the balance sheet. This strategic approach aligns with our past divestments in consumer product good brands Brave and Basis, where Creatd retains a 7.5% stake in each company, along with royalty and service agreements. After the next phase of balance sheet improvements, all companies within the Creatd portfolio should be cash flow positive and be in positions to independently determine their own listing strategies.
I recognize today that structuring Creatd as a portfolio holding company was the optimal path, as the company was hampered by collapsing capital markets following the rapid rise in interest rates. This period, beginning with the global financial liquidity injection in 2017 and exacerbated by the pandemic relief funds in 2021, has taught us invaluable lessons about market dynamics and strategic decision-making. In the future, small, agile groups with no physical boundaries and the right resources can thrive in public markets. For now, survival is key.
Reflecting on 2023, it was a year of adaptation and the search for new opportunities. The Vocal platform, home to over 2 million creators, emerged as a beacon of hope, demonstrating the empowering value of creative expression. Our platform's growth reassured us that our core idea was resonating with people. Every new user and story published underscored that our journey was about more than just financial metrics.
Throughout the year, I discussed the challenges in small-cap public markets, a battlefield laden with bureaucracy and systemic inequities. My discussions were not just critiques, but an expression of our moral and empathetic ache extended towards our peers in these treacherous waters. My frustration stemmed from the indifference in the post-Covid era, where survival often eclipses collaboration and understanding.
As 2023 drew to a close, I reflected on these themes and their impact on Creatd. It's been a year of navigating a market influenced by powerful entities and systemic issues, yet also a year of learning, adapting, and growing stronger.
Looking ahead to 2024, my message is one of opportunity. Creatd and the companies it has nurtured will ultimately prevail, and I have come to realize that the thing is not the thing when the world turns upside down. The thing was survival. Now the thing is execution.