Reddit's site will be 'more vibrant' post-IPO: WallStreetBets mod.

Reddit (RDDT) listed on the New York Stock Exchange via an IPO on Thursday, completing its first full trading day on Friday, March 22. r/WallStreetBets — a "subreddit" or community page on the social media site — was instrumental in jumpstarting retail investors' participation in the meme stock trade, including GameStop's (GME) rapid rise in early 2021. What do Redditors think about their preferred social platforming choosing to go public?

WallStreetBets Head Moderator Noor Al shares his thoughts on Reddit's use of generative AI, the site's profitability, and his community's own abilities to engage with one another.

"This is a company that's been hamstrung by having to operate on a shoestring budget for basically its entire life. With $750 million more in the bank, who knows how many more staff they're going to add, what kind of new features they're going to build out — I think the sky's the limit," Al says.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: Reddit shares sliding in second day of trading giving up some of the gains seen in public debut. Company allowing customers to participate he tried to say in the IPO alongside institutional investors. Looking ahead, Reddit execs are eyeing the next phase for the company with more AI and advertising for a pulse on users sentiment after the platform's market debut.

We have Reddit user, Noor Al, Head Moderator of Wall Street Bets. Noor, it is good to see you. Maybe start by explaining to the audience. What does a moderator exactly do? What are the roles and responsibilities there? And how long have you been doing it, Noor?

NOOR AL: Sure. Yeah, I've been a moderator for Wall Street bets for about nine years now. And really the responsibilities are about as varied as it gets whether you're building bots to help maintain the sub 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 all in a day's work of driving community and culture.

JULIE HYMAN: And so, Noor, obviously, you are a fan of Reddit because you've been on it for a while. Do you think that it is a good investment as an IPO? And did you get any shares in the IPO?

NOOR AL: I wish I got shares in the IPO. I am Canadian. So it wasn't eligible for the DSP.

But a lot of fellow moderators did. And congrats to them. It's up 30% since their entry. I think this is a great thing for Reddit and for Wall Street bets. I think the platform is going to become a lot more vibrant. And really looking forward to seeing where this goes.

JOSH LIPTON: Why do you say that, Noor? Why are you confident that it's going to become even more vibrant as you put it?

NOOR AL: Because, I mean, this is a company that's been hamstrung by having to operate on a shoestring budget for basically its entire life. With 750 million more in the bank, who knows how many more staff they're going to add? What kind of new features they're going to build out? I think the sky's the limit.

JULIE HYMAN: So what's on your wish list as a moderator, as a user? What are some of the changes? Just purely, again, to your point kind of if money is no object, how would you make Reddit a better place?

NOOR AL: I think, actually, Reddit has empowered us to build a lot of the stuff that we want to see. And so we've built within Wall Street bets a whole lot of games and interactions for our community, such as banned bets, or having sticky posts by users. These are all things that Reddit has given us the ability to run off and go do.

And now, Reddit's come out with something really cool. That no one's really been talking about, which is the developer platform, which allows users to actually build apps within Reddit. I think this is going to be the next big evolution in Reddit.

And again, no one's really been talking about it. It's in private beta. And it's going to completely change how Reddit operates I think.

JOSH LIPTON: And, Noor, part of the excitement I think for Reddit was the way it's kind of pitched itself as an AI play, Noor. This idea that it will allow third parties to license access to data on the platform. As a moderator, what do you make of that strategy? Are you a fan of it?

NOOR AL: I think it's great because it incentivizes Reddit to ensure that the content on its platform is actually human, it's actually authentic. Because as soon as that data becomes poisoned with other auto-generated content, the value of the whole data set goes down. So this is aligning Reddit's incentives with the incentives of the user and keeping Reddit authentic.

JULIE HYMAN: Do you think, though, that it sort of is teaching Gen AI how to replace it in the longer-term?

NOOR AL: Sure. Yeah, there's no problem with that. I think the ultimate goal of Reddit, or Google, or any of these information categorization systems is to present the most pertinent information to the user. And I think there's definitely a place where you want to talk to a human and get their perspective. And then there's times where you want to summarize the perspective of all humans. And so I think it's actually the perfect balance.

JOSH LIPTON: Were you surprised, Noor? I'm just curious. You've been a moderator there for a while. Were you surprised when you saw the company's financials in any way?

The company's been around so long. But still was posting a net loss around $90 million in 2023. Did that surprise you, Noor, when you saw that?

NOOR AL: No, not at all. I think we all knew that Reddit had been losing money year-after-year for so long. And I think it's actually been reflected in the fact that ads on the platform really haven't been that invasive and weren't that invasive for a very long time. They only recently within two or three years shifted from programmatic ads to direct deals which is a huge jump in revenue per user.

So they're definitely all the way shifting in the right way. The one thing that did surprise me was, or two things actually, one was how little revenue they made from Reddit premium. Only 2% of their revenue came from Reddit premium.

And two, how they were actually profitable for the first time in Q4 of last year. So for the first time in their 20-year lifespan, they've had a profitable quarter.

JULIE HYMAN: Noor, I also want to ask you, you're on Wall Street bets which obviously we in the financial media started paying a lot more attention to a couple of years ago with the sort of meme stock boom. What's the vibe there these days? What's the hot trade. Give us some Wall Street bets insight.

NOOR AL: Absolutely. We've all been about AI and NVIDIA lately. We got on the bandwagon quite early. And so we've had a lot of people within our community realize tremendous gains on NVIDIA.

Right now, because of Reddit blowing up, and this being the IPO week, we're seeing a lot of traction around that. But at any given point, we're always highlighting the top tickers in our community that are being discussed. And so today, we were looking at DWAC, NVIDIA, and Reddit. These were the top three. And I think that represents the average Redditor on Wall Street bets quite accurately.

JULIE HYMAN: It represents us pretty well, too, Noor, because that's what we've been talking about today also. Thank you so much. Really appreciate it. Have a great weekend.

NOOR AL: Thanks. You as well. Cheers.