Daily Brief - The 10 investing Reddits you should follow (Dec 28, 2021)
Reddit is filing for IPO, bringing one of the last two great social apps to the public market.
Pretty much all other notables are public or acquired by a public company - from Meta/Facebook to Pinterest, from Snap to Linkedin. TikTok stands as the exception.
In general this would make for a secondary headline of little relevance to investors looking for market-moving news.
What makes the story much more relevant for traders is the disproportionate impact that Reddit has had on public markets in 2021.
The anonymous model of social interaction enabled by the company allowed the r/Wallstreetbets community to thrive, but that is by no means the only subreddit focused on investing.
Here are some notable investing communities and their user count:
These are large numbers and they’ve shown that they can move markets: Wallstreetbets was 2M when the GME adventure began.
However as Reddit accepts public scrutiny, that might change what it finds acceptable for its communities.
With $100M in revenues, Reddit’s latest round valued it at $10B. Even if the IPO does nothing more than trade at the last value, the stock would be looking at a Price/Sales multiple of 100x.
With a greater focus on revenue growth, Reddit might move away from the free-wheeling, self moderated forum that birthed Wallstreetbets.
Or maybe the company could just sell itself to its users. Wallstreetbets alone could snap it for $900 per user.
Unsurprisingly, the idea was indeed floated.