I am looking at it froma purely financial standpoint.
Then let’s do that.
Reddit has three official and one implied revenue streams.
Of the official, we have:
Ad sales. This is where most “user data” actually comes into play and is the idea of building a profile of each user that can be used to put them into categories for targeted ads. That might be a simple as “likes video games, hates women, curious about learning to pee while sitting down”. Or it might be “doesn’t realize that guy at the bar took off the condom and is now pregnant”. This is demonstrably profitable and doesn’t seem to be effected.
The next is people buying reddit premium because they are idiots.
The last official oneis the actual topic of this thread. Reddit sells API access to, among others, companies training LLMs. ChatGPT has, allegedly, stopped using them. Thus, one of their major sources of revenue dried up and their stock dropped as a result.
As for the rest:
Otherwise reddit stock is just a volatile place to park your cash in the hope that you can sell it for more later.
Ah, so you DO know what the definition of a stock is. You just refuse to accept it because the word “reddit” is involved.
The vast majority of stocks are horrible to even consider purchasing as an individual. A general rule of thumb is the only ones you should even consider buying are those with dividends where you just buy a few shares and every couple years check your investment account and transfer the excess to your savings.
The rest you rely entirely on mutual funds (and similar). Where the idea is that an investment group has a large pool of money and they try to stay ahead of minor fluctuations and often outright bet against themselves. So you might have some funds earmarked at assuming reddit will go up and other funds that take the Oracle announcement as a hint that OpenAI spending on Reddit might decrease and sell the stocks ahead of time to buy shares in coca cola instead or whatever.
But the thing to understand is that that is happening to basically every single stock. Because the fundamental idea of the stock market is about leaving others holding the bag.
Then let’s do that.
Reddit has three official and one implied revenue streams.
Of the official, we have:
Ad sales. This is where most “user data” actually comes into play and is the idea of building a profile of each user that can be used to put them into categories for targeted ads. That might be a simple as “likes video games, hates women, curious about learning to pee while sitting down”. Or it might be “doesn’t realize that guy at the bar took off the condom and is now pregnant”. This is demonstrably profitable and doesn’t seem to be effected.
The next is people buying reddit premium because they are idiots.
The last official oneis the actual topic of this thread. Reddit sells API access to, among others, companies training LLMs. ChatGPT has, allegedly, stopped using them. Thus, one of their major sources of revenue dried up and their stock dropped as a result.
As for the rest:
Ah, so you DO know what the definition of a stock is. You just refuse to accept it because the word “reddit” is involved.
The vast majority of stocks are horrible to even consider purchasing as an individual. A general rule of thumb is the only ones you should even consider buying are those with dividends where you just buy a few shares and every couple years check your investment account and transfer the excess to your savings.
The rest you rely entirely on mutual funds (and similar). Where the idea is that an investment group has a large pool of money and they try to stay ahead of minor fluctuations and often outright bet against themselves. So you might have some funds earmarked at assuming reddit will go up and other funds that take the Oracle announcement as a hint that OpenAI spending on Reddit might decrease and sell the stocks ahead of time to buy shares in coca cola instead or whatever.
But the thing to understand is that that is happening to basically every single stock. Because the fundamental idea of the stock market is about leaving others holding the bag.