I’ve round 8000$ in RDDT invested proper now.
At first I wanna clarify, that I’m invested and imagine that a lot of the issues mentioned on this sub will come true and that this can be a nice firm with an important product which has a lot low hanging potential which can be unleashed.
I’m a long run investor and I’m interested by the following 2, 5 and 10 years. I’ve no downside with the volatility.
It is a query of valuation solely.
I need to zoom out and give attention to the realiy and never doable future eventualities as a result of no person can see into the long run and nothing is 100% certain.
I made a variety of analysis to know the inventory firm and all of the potential, however there’s one query which I couldn*t reply myself even robust I did some analysis on it. This query doesn*t appear to be mentioned right here in any respect.
The one dialogue I noticed was this one right here, the place everybody was in opposition to the OP and couldn*t actually dissolve his considerations different then “The longer term is nice due to …..” (which all of us already know and which the market is aware of) : https://www.reddit.com/r/RedditIPO/feedback/1j81q8o/time_to_shreddit_or_is_there_still_a_chance/
On this put up he describes it effectively that solely as a result of a product and firm and the long run are nice doesn*t all the time automaticly imply, that the inventory has to go up. I all the time like to take a look at general tendencies and historical past. And If I have a look at all these different social media corporations which rely totally on simply adverts and have seen excessive consumer development prior to now and had a hype are going now facet methods. In case you simply did purchase and maintain you probably did earn money however these haven*t been shares the place it simply goes up in a straigth line. (might be very risky, however with fixed pattern that its a winner inventory) They principally go sideways and have been staying on the identical stage for years now.
What I imply with winner inventory, for instance IBKR. They’ve had a variety of volatility and a variety of downfalls. (In case you look again and zoom out it simply doesn*t appear like this inventory has fallen so much throughout some durations)
For me it is smart to speculate extra into Reddit if it’s going to turn into a winner inventory like this for instance which has big falls however the sucess is in a long run uptrend.
And yea, I do know Reddit is now additionally making 15% of its income with AI offers with Google and OpenAI. That is after all good and nice, however adverts will nonetheless be the principle income stream for the following 5 years. The Ai offers are overhyped. Most Ais simply hold scraping it and there’s virtually nothing reddit can do to restrict scraping. it’s going to nonetheless be cheaper to simply scrape it then to make a take care of Reddit except you’re a large firm like Google or ClosedAi chatgpt
And yea, Onlyfans and Patreon paywall content material has big potential and can be nice, however most customers are nonetheless used to not pay for something on the web and also will not accomplish that within the subsequent years. Simply have a look at https://www.reddit.com/r/Piracy/
By the best way, the r/Piracy sub has been rising massivly over the previous few months. Only in the near past cracked the two Mio subscriber and now already at 2.1 Mio customers.
Twitter (earlier than Elon purchased it)
After all you possibly can earn numerous cash with Twitter, however solely with good timing. For instance in case you would have purchased in 2014 at 45 and even 50, you practicly wouldn*t have made virtually any cash. It solely went up in the previous couple of years, as a result of Elon purchased it. In any other case it might have stayed down there.
Everybody all the time says “Oh, it gotta be no less than as a lot value as Twitter which was 40 billions” – However this was solely value that a lot due to the buyout which many stated was method method overpriced. As you may see on this chart Twitter was principally not value 40 billions. So this argument sounds good however is missing.
Twitter has had comparable consumer quantity to Reddit. (not precisely the identical, however higher then comparability with SNAP)
If I put money into one thing, then I don*t need to depend on insanely good timing of shopping for into and when to take income. Perhaps you purchase in low cost however you see the pattern of the ricing prises and suppose “yea, the long run appears nice, the product is getting higher, extra customers …), however you don*t understand that the inventory has turn into method too overvalued.
Basicly all these Social media shares crashed after Corona was over.
SNAP
It*s a nasty comparability as a result of there’s a logical cause why they will*t develop advert income as reddit can: The customers principally use it for chatting and also you don*t need to have adverts in your chat, in any other case you’ll simply swap to whatsapp or instagram or no matter children use lately.
PINS – Pinterest is extra attention-grabbing and with outdated Twitter the higher comparability as a result of they’re far more related then Snapchat.
PINS is now value $21.66 B. (https://companiesmarketcap.com/pinterest/marketcap/)
RDDTs Marcet cap is now presently $23.19 B https://companiesmarketcap.com/reddit/marketcap/
Now RDDT is enticing as a result of it has far more customers then PINS and in all of the issues which have already got been mentioned so much far more potential then PINS. The valuation now appears enticing in a comparability. PINS just isn’t in a hype in any respect, so it must be good for comparisons.
I’m not Professional with PINS. I requested a number of Chatbots to match these two and what precisely went fallacious with Pinterest.
Plainly since 2022 the customers growh has been slowing down of the month-to-month energetic customers. Sounds related. This has been occurring to Reddit not too long ago and can all the time be an enormous hazard for shert time period worth additionally sooner or later due to too excessive development expectations and hype.
Extra competitors with Tiktok and Instagram for PINS.
Reddit just isn’t instantly competing as a lot with these platforms, so this shouldn*t be such an enormous situation for RDDT. Reddit is extra primarily based on Textual content and like a Discussion board.
Pinterest is simply footage.
The brand new advert codecs and advert instruments which have been launched by PINS hasn’t discovered as a lot acceptance by the individuals who do advert campagnes.
The technique of PINS now appears to be the mixing with e commerce to instantly purchase the product. This already has been mentioned on this sub right here and also will be most likely carried out by reddit sooner or later. (It*s not a precedence in line with the latest calls) This e commerce integration appears to take extra time then anticipated.
“Monetization Challenges: Regardless of a considerable consumer base, Pinterest has struggled to successfully monetize its platform. The corporate’s heavy reliance on promoting income makes it weak to fluctuations in promoting spend, particularly throughout financial downturns or shifts in advertising tendencies.”
“Pinterest: As of January 2025, Pinterest’s international month-to-month energetic customers (MAUs) reached 537 million, marking an 11% year-over-year improve.” – I’ve by no means know anybody who has ever used that platform, however okay.
The difficulty additionally appears to be that Pinterest hasn’t been capable of entice these large advertisers that consistently run advert campaigns. Reddit is beginning to get extra of these large names in and already has been sucessful on this (no less than to my present data).
Abstract of PINS: Related downside – development can decelerate – extra customers doesn*t automaticly translate into extra advert income per consumer – diffictulty to compete with large extra superior advertisers like META, Google, Tiktok, Insta.
If I might need to run an advert marketing campaign I most likely additionally would simply go to google or Meta as a result of these are know. I suppose that the majority advertising folks presently don*t see Reddit on the similar stage as an choice to run their adverts there, due to missing options out of the attitude of somebody who’s used to the nice suites of Google and Meta. (I’m not an professional on this) That is additionally an opportunity for Reddit to repeat the identical issues these large guys are doing to make it simpler for folks to promote. This should additionally work about branding.
In case you have a look at corporations or organisations, within the final 12 months everybody and their mom has created a tiktok account and began promoting there, due to the hype. Tiktok turned a reputation that turned so essential, that at the same time as an outdated particular person you couldn*t keep away from it. Take a look at all these politicans posting bizarre tiktoks. Take a look at all these corporations promoting there, as a result of they hope to revenue from the hype. Each establishment or politican has a tiktok, insta, even X or these days bluesky account. Many even have Threads, however no person has Reddit. Actually no person. I do know Reddit is a group and never a I comply with this man platform, however that is additionally an enormous cause why not so many individuals promote right here in comparison with the massive platforms.
-Reddit has to additionally turn into a reputation you may*t keep away from as an advertiser. I don*t know the way we are able to get there. Perhaps different platforms will worsen and thats why folks begin promoting extra on Reddit for the group and the engagement, as a result of it may be extra particular.
So if we break it all the way down to what can*t occur for the inventory to suceed long run:
-user development slowing down
-expected Income cannot be delivered as a result of extra customers doesn*t imply extra income per consumer
-competition with large advert manufacturers (out of the attitude of an advertiser, not of the content material platform itself for its customers)
-short time period hypes (you purchase in when its overvalued and it by no means ever goes again to this stage once more)
-stock going sideways and staying on the identical stage as Pinterest
!! You had a variety of alternative price since you may have additionally invested in a inventory which brings returns!!
PINTEREST – Sideways
So, I do know this isn’t effectively structured and too lengthy, however yea, thats what it’s.
If somebody can dissolve this solely concern then I need to purchase so much (1/3 of all my cash).
Please don*t really feel personally offended. I’m simply laying down my ideas.
Edit: It is a crosspost from right here https://www.reddit.com/r/RedditIPO/feedback/1jbfvp0/why_will_rddt_not_become_the_next_pins_twtr_snap/
