April 14, 2024

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Reddit will be 'more vibrant' after IPO: WallStreetBets mod.

Reddit will be 'more vibrant' after IPO: WallStreetBets mod.

Reddit (RDDT) listed on the New York Stock Exchange through an initial public offering on Thursday, completing its first full day of trading on Friday, March 22. r/WallStreetBets — a “subreddit” or community page on the social media site — has been instrumental in initiating retail investor participation in meme stock trading, including the meteoric rise of GameStop (GME) in early 2021. What Redditors Think of Choosing their favorite social platform to go public?

Nour Al, head moderator of WallStreetBets, shares his thoughts on Reddit's use of generative AI, the site's profitability, and its community's abilities to interact with each other.

“This is a company that has been disrupted by having to operate on a shoestring budget its entire life. With an additional $750 million in the bank, who knows how many additional employees they will add, and what kind of new features they will add?” “We'll build — I think the sky's the limit,” Al says.

For more expert insights and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's Note: This article was written by Luke Carberry Maughan.

Video version

Josh Lipton: Reddit shares fell on the second day of trading, giving up some of the gains seen in its public debut. The company allows customers to participate in an IPO alongside institutional investors. Looking to the future, Reddit executives are looking forward to the company's next phase with more artificial intelligence and ads to highlight user sentiment after the platform makes its market debut.

We have Reddit user, Nour Al, Head of Wall Street Bets. Nour, good to see you. Maybe start by explaining to the audience. What exactly does a supervisor do? What are the roles and responsibilities there? How long have you been doing this, Nour?

Nour Al: certainly. Yes, I have been a Wall Street betting broker for about nine years. In fact, the responsibilities are as varied as they can be whether you're creating bots to help maintain the subreddit or just browsing the subreddit as a regular user and uploading things you like or don't like, and removing comments and posts that break the rules. It's quite the mixed bag. But it's all in a day's work that drives society and culture.

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Julie Heyman: So, Nour, you're clearly a fan of Reddit because you've been using it for a while. Do you think it is a good investment as an IPO? Did you obtain any shares in the IPO?

Nour Al: I hope to get shares in the IPO. I am Canadian. Therefore he was not eligible for DSP.

But many of his fellow supervisors did. And congratulations to them. It's up 30% since they came in. I think this is great for Reddit and Wall Street bets. I think the platform will become more vibrant. I'm really looking forward to seeing where this goes.

Josh Lipton: Why do you say that, Nour? Why are you so confident that it will become more lively as you said?

Nour Al: Because, I mean, this company has been disrupted by having to operate on a shoestring budget its entire life. And with an additional 750 million in the bank, who knows how many more employees they will add? What kind of new features will they build? I think the sky is the limit.

Julie Heyman: So, what's on your wish list as an admin, as a user? What are some changes? Just, again, to your point, if money was no object, how would you make Reddit a better place?

Nour Al: I think, actually, Reddit has enabled us to build a lot of the things we want to see. So we've built a wide range of games and interactions for our community around Wall Street Bets, such as blocked bets, or pinned posts by users. These are all things that Reddit has given us the ability to go out and do.

And now, Reddit has come out with something really cool. No one really talks about it, which is the developer platform, which allows users to actually build apps within Reddit. I think this will be the next big development in Reddit.

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And again, no one really talked about it. It is in private beta. This will completely change the way Reddit works I think.

Josh Lipton: And I think part of the excitement for Reddit, Noor, was the way it presented itself as a play on artificial intelligence, Noor. This idea is that it will allow third parties to license access to data on the platform. As a supervisor, what do you think about this strategy? Are you a fan of that?

Nour Al: I think it's great because it motivates Reddit to make sure that the content on their platform is actually human, and is actually authentic. Because once that data is poisoned by other automatically generated content, the value of the entire data set decreases. This means aligning Reddit incentives with user incentives and maintaining Reddit's authenticity.

Julie Heyman: However, do you think this is teaching the AI ​​generation how to replace it in the long term?

Nour Al: certainly. Yes, there is no problem with that. I think the ultimate goal of Reddit or Google or any of these information classification systems is to provide the most relevant information to the user. And I think there's definitely a place where you want to talk to a human being and get their perspective. Then there are times when you want to summarize the point of view of all humans. And so I think it's actually the perfect balance.

Josh Lipton: Are you surprised, Nour? I'm just curious. I was a supervisor there for a while. Were you surprised in any way when you looked at the company's financial statements?

The company has been around for a long time. But it still posted a net loss of about $90 million in 2023. Did that surprise you, Nour, when you saw that?

Nour Al: not at all. I think we all know that Reddit has been losing money year after year for a long time. And I think that's really reflected in the fact that the ads on the platform haven't really been invasive and haven't been invasive for a very long time. They have only recently switched in two or three years from programmatic advertising to direct deals, representing a huge jump in revenue per user.

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So they are definitely turning all the way in the right direction. The only thing that surprised me was, or two things actually, one of them being how little revenue they made from Reddit premium. Only 2% of their revenue came from Reddit Premium.

The second is how they achieved actual profits for the first time in the fourth quarter of last year. So, for the first time in their 20-year life, they had a profitable quarter.

Julie Heyman: Noor, I also want to ask you, you're betting on Wall Street, and obviously we in the financial media started paying more attention to it a couple of years ago with kind of the meme stock boom. What's the atmosphere like there these days? What is hot trade? Give us some information about Wall Street bets.

Nour Al: definitely. We've all been talking about AI and NVIDIA lately. We jumped on the bandwagon too early. And so a lot of people within our community have made huge gains on NVIDIA.

Right now, because of the Reddit explosion, and this is IPO week, we're seeing a lot of interest around that. But at any given moment, we always highlight the most important trends in our community that are being discussed. Today, we were looking at DWAC, NVIDIA, and Reddit. These were the top three. I think this represents the average Wall Street Redditor's bets quite accurately.

Julie Heyman: It represents us well too, Nour, because that's what we were talking about today as well. Thank you very much. Really appreciate it. Have a nice weekend.

Nour Al: Thanks. You, too. Cheers.