#rddt

I'm really intrigued by Reddit’s rise into the mainstream. (See Google Trends chart)

A social news platform, full of memes, geeks, enthusiasts, and plenty of NSFW content - I’ve always felt at home. However I considered it a niche space, mostly for techies, with a strong male bias.

But after sending endless links to a female, "normie" friend - stories about breakups, perimenopause, and Gen X - she’s become hooked. Now, she spends hours browsing movie reviews, wellness tips, and real-life anecdotes.

So, has Reddit gone mainstream? Has it hit that “Anita tipping point”?

Reddit has historically been a poor cousin to other social media platforms in terms of revenue. The platform attracts a diverse group of people, but it tends to have a core of left-leaning, progressive individuals who value transparency, free speech, and community-driven content. Users are generally quick to critique anything they feel is disingenuous or overly commercial, which is why they often use ad blockers and reject corporate influence on the platform. That makes them a harder target for advertisers.

Reddit makes average revenue per user of only <$3. Compare this with Facebook which averages >$40 per user.

Founded in 2005, Reddit went public on March 21, 2024, with the ticker symbol "RDDT" on the New York Stock Exchange. They priced the IPO at $34 per share, aiming for a $6.4 billion valuation. The offering was oversubscribed, showing strong investor interest. On its first day of trading, Reddit’s stock jumped about 54%, hitting $52.29 per share and boosting its market cap to $9.5 billion.

By Q3 2024, Reddit reported a major financial milestone -its first quarterly profit. Daily Active Users (DAUs) grew 47%, reaching 97.2 million. It’s now the third most visited site in the U.S. As of writing, the stock is hovering around $140 mark, giving the platform a market cap of $24.8 billion. It’s definitely an inflated price for a company with little meaningful net profit, but that’s exactly what Facebook was when it IPO'd in 2012.

Some say changes to Google’s algorithm might have contributed to Reddit’s recent surge, and the decline of Twitter could be sending more users its way. Reddit’s 12-year history of user-generated content, is now a valuable resource for companies like OpenAI and Google for AI training.

I’m fascinated. Can this old-school, mostly text-based platform appeal to a wider audience without losing what made it so popular in the first place?

Reddit's IPO

I enjoyed speaking with CNBC's Jonathan Vanian, about Reddit's decision to become a publicly-traded corporation. It will appear on the NYSE today.

Reddit is unusual in being run largely by unpaid volunteers. I lead its Equestrian community, as one of 60'000 volunteer Moderators.

For better and for worse, that gives Reddit an entirely different culture from other social media.

We shall see if that culture survives its transition to the stock market.