00:00 Speaker A
Let’s talk about Reddit because it is going into the S&P 500 before the open. Um, I believe next Tuesday is what we’re talking about. Um, I was looking at, I mean Reddit this year has been a little rockier, but it went public back in 2024, a split adjusted $34. It’s trading at almost 175 ahead of the open because it’s up on the news that it’s going in. And like, I find it so remarkable. Like scrappy little Reddit where like millions of random people are talking about all kinds of, you know, I mean Reddit at one time had a little bit of a sketchy reputation, right?
00:53 Speaker B
It did.
00:54 Speaker A
As as a not as a company, but as a platform in terms of the discourse that was going on there.
00:54 Speaker B
It did. Harboring some less, uh, you know, less dinner table discourse.
01:02 Speaker A
Sure. And here it is going into the S&P 500. It’s all grown up.
01:07 Speaker B
Yeah. Well, let me give you a little briefer history of Reddit because it became one of the dominant players in SEO. Why? Because it was wisdom of the crowds. It was what people were saying personally, whether it was product reviews or their opinions about things. And there was a period of time there, not that long ago before chat GPT and before all of this, where that mattered more on the SERP, on the Google search engine. And and Reddit went from being kind of obscure to, oh my gosh, it’s at the top of every search result. Now we had chat GPT and everything got thrown out. The whole SEO business got turned on its head. But guess what? We may be back on the other side of the pendulum. I have young people in my life, my daughters are in their early 20s and a lot of people that I talk to. They don’t like using chat. They don’t like using open AI. They would rather have authenticity and real people. And I think you’re seeing a return to that, hopefully, authenticity, expertise, even the wisdom of the crowds, but not brought to you by an LLM.
02:08 Speaker A
Well, except that Reddit has made deals with the LLM’s to to train their models with its content. And one of the reasons that the stock fell more recently after its earnings report is because it didn’t have any new deals to feed ’em. It also is distancing itself from Google, which is also interesting. It’s made that decision. Um, I was looking at a recent note from Mark Mahaney over at Evercore ISI, and he’s been a bull on this stock, although he did cut his price target to 265 from 300. Um, but he said the big long-term question is whether Reddit can hit its goal of roughly doubling its US uh daily active user base from about 53 million to 100 million and also continue to grow its uh international base. Now, if what you say is true and people like want that authenticity, maybe maybe they’re on the path to to getting there.
