Op-Ed: What next for Reddit? Investor mindsets, that’s what.

Reddit says it has submitted a draft registration with the US Securities and Exchange Commission to go public – Copyright AFP Eva HAMBACH

Reddit is the “front page of the internet” according to it, and every so often in fact. The sprawling multifaceted site can be anything Today, it looks like a personals page. Tomorrow, it could be multiple controversies.

Reddit did very well in its initial NYSE listing. The price went up around 48% or so. Market sages say this indicates that there’s an appetite for new listings. No, it doesn’t, but that’s the market for you, talking itself up.

Reddit is unique. It’s a social media platform with a difference. Reddits and Redditors are pretty intense. The site got a well-deserved reputation in its early days as the home of the constant replies to comments and original statements. It can be abrasive. It can also be insightful.

What it definitely isn’t is any sort of conventional social media platform. Nor is it a commercial site. The traditionally plodding and stodgy process of an actual stock valuation for Reddit could and should take some time.

What will it do, as an investment? Will choirs of dividends arise, signalling the coming of the Promised IPO? Or will it sit there for 20 more years baffling investment advisors? Quite possibly both.

This is a major issue. It took ages for the market to learn how to analyze Facebook. Spring the magic word, “cost-cutting” and the stock takes off. The market still doesn’t get social media listings too well. Twitter was another case in point. Reddit is much more unconventional than either of those platforms.

It will have some stability in ownership. 30% of Reddit is owned by Advanced Publications, the people who own Conde Nast. They’ve made their point about Reddit very well. Reddit’s IPO was a true success.

Reddit has a characteristic that is anything but obvious. It’s a very simple site. You could put anything at all on that site without damaging the furniture. You could run any commercial operation albeit under the eyes of perhaps the most critical audience online anywhere.

The site has a lot of market reach. Reddit routinely lists well on many specialist searches. You get experts and advocates, debunkers and debatables. If you want to be seen in a market, this is one of the places to be seen. This audience may or may not like what it sees, but seen, you will be.

It can also be smarter than the market, when it gets round to it. Plugs on a subreddit raised a little-known stock called GameStop to a major news item thanks entirely to the subreddit. (To be fair, I checked out the company, and the subreddit was pretty effective in its analysis, which was quite conventional.)

I think Reddit can maneuver itself into good commercial options without affecting the site and without infuriating users. These would be add-ons, niches, or subreddits in specific fields. Redditors like good information and new things.

After all, that’s what they’re there for. I wish Reddit well in its new role as a market nuisance. You’ll just have to wait for market thinking to catch up.

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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.