I’ve round 8000$ in RDDT invested proper now.
At first I wanna clarify, that I’m invested and consider that a lot of the issues mentioned on this sub will come true and that this can be a nice firm with an incredible product which has a lot low hanging potential which will probably be unleashed.
I’m a long run investor and I’m enthusiastic about 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 one can see into the longer term and nothing is 100% positive.
I made a variety of analysis to know the inventory firm and all of the potential, however there may be one query which I couldn*t reply myself even powerful 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 towards 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 publish he describes it nicely that solely as a result of a product and firm and the longer term 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 total traits and historical past. And If I have a look at all these different social media corporations which rely totally on simply advertisements and have seen excessive person development up to now and had a hype are going now facet methods. In case you simply did purchase and maintain you probably did become profitable however these haven*t been shares the place it simply goes up in a straigth line. (will be very unstable, however with fixed pattern that its a winner inventory) They largely 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 to be this inventory has fallen loads throughout some intervals)
For me it is smart to take a position extra into Reddit if it’s going to change into a winner inventory like this for instance which has large 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 advertisements 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 may be nearly nothing reddit can do to restrict scraping. it’s going to nonetheless be cheaper to simply scrape it then to make a cope with Reddit until you’re a big firm like Google or ClosedAi chatgpt
And yea, Onlyfans and Patreon paywall content material has large potential and will probably be nice, however most customers are nonetheless used to not pay for something on the web and also will not achieve this 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 recently cracked the two Mio subscriber and now already at 2.1 Mio customers.
Twitter (earlier than Elon purchased it)
After all you could possibly earn a number of cash with Twitter, however solely with good timing. For instance in the event you would have purchased in 2014 at 45 and even 50, you practicly wouldn*t have made nearly 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 a minimum of 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 approach approach overpriced. As you may see on this chart Twitter was largely not value 40 billions. So this argument sounds good however is missing.
Twitter has had comparable person quantity to Reddit. (not precisely the identical, however higher then comparability with SNAP)
If I spend money on one thing, then I don*t need to depend on insanely good timing of shopping for into and when to take income. Possibly you purchase in low cost however you see the pattern of the ricing prises and suppose “yea, the longer term appears to be like nice, the product is getting higher, extra customers …), however you don*t understand that the inventory has change into approach 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 largely use it for chatting and also you don*t need to have advertisements in your chat, in any other case you’ll simply swap to whatsapp or instagram or no matter youngsters 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 engaging as a result of it has far more customers then PINS and in all of the issues which have already got been mentioned loads far more potential then PINS. The valuation now appears engaging in a comparability. PINS isn’t in a hype in any respect, so it ought to be good for comparisons.
I’m not Professional with PINS. I requested a number of Chatbots to check these two and what precisely went improper with Pinterest.
It appears that evidently since 2022 the customers growh has been slowing down of the month-to-month lively 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 value additionally sooner or later due to too excessive development expectations and hype.
Extra competitors with Tiktok and Instagram for PINS.
Reddit isn’t straight competing as a lot with these platforms, so this shouldn*t be such an enormous challenge for RDDT. Reddit is extra based mostly on Textual content and like a Discussion board.
Pinterest is simply photos.
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 combination with e commerce to straight purchase the product. This already has been mentioned on this sub right here and also will be in all probability performed 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 person base, Pinterest has struggled to successfully monetize its platform. The corporate’s heavy reliance on promoting income makes it susceptible to fluctuations in promoting spend, particularly throughout financial downturns or shifts in advertising and marketing traits.”
“Pinterest: As of January 2025, Pinterest’s international month-to-month lively 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 appeal to these large advertisers that always run advert campaigns. Reddit is beginning to get extra of these large names in and already has been sucessful on this (a minimum of to my present data).
Abstract of PINS: Comparable downside – development can decelerate – extra customers doesn*t automaticly translate into extra advert income per person – diffictulty to compete with large extra superior advertisers like META, Google, Tiktok, Insta.
If I might need to run an advert marketing campaign I in all probability additionally would simply go to google or Meta as a result of these are know. I assume that the majority advertising and marketing individuals presently don*t see Reddit on the similar stage as an choice to run their advertisements there, due to missing options out of the angle of somebody who’s used to the good suites of Google and Meta. (I’m not an skilled on this) That is additionally an opportunity for Reddit to repeat the identical issues these large guys are doing to make it simpler for individuals 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 whilst an outdated individual you couldn*t keep away from it. Have a look at all these politicans posting bizarre tiktoks. Have 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 one has Reddit. Actually no one. I do know Reddit is a group and never a I observe 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 change into a reputation you may*t keep away from as an advertiser. I don*t understand how we are able to get there. Possibly different platforms will worsen and thats why individuals 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 right 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 person
-competition with large advert manufacturers (out of the angle 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 value since you might have additionally invested in a inventory which brings returns!!
PINTEREST – Sideways
So, I do know this isn’t nicely structured and too lengthy, however yea, thats what it’s.
If somebody can dissolve this solely concern then I need to purchase loads (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/
