Reddit Stock Lore

+ The return of floppy discs

Author

Salin Awad
February 28, 2024

In this issue:

PRESENT
-Is Reddit the New Meme Stock?-
-Mini-Stories: Floppy Discs, SBF, Diddy-

PAST
-World’s Prettiest Library Was Once a Cotton Factory-
-Link Hell: Robert Fagot, Snow Strippers, YouTubers Quitting-

“Three may keep a secret, if two of them are dead.”
— Benjamin Franklin

O
V
E
R
W
O
R
L
D

✦Top Trends✦

✖️X: Meek Mill

🔎Google: Shogun

🕺🏼TikTok: No Wind Resistance!

🎵Spotify: Dancing In Babylon


Markets

Is Reddit the New Meme Stock?

As Reddit is inching closer to its stock market debut, two questions have been troubling stock degenerates worldwide:

“Will it eat shit and die? Or is it a Yolo meme stock?”

And that’s why we’re going to probe this thing.

✦4 Reasons for Reddit to Flop✦

1. The core of Reddit is its users:
Reddit has over 60,000 daily active moderators. They’re the foundation of Reddit; no mods, no Reddit. Which is nice… but there’s a caveat: these guys are unpaid. They do it out of love.

Contrast this with how CEO Steve Huffman made $193M last year. With that money, you could pay 20,000 moderators $10,000 each. Obviously, that’s not feasible - but it highlights the tension between the users who make up the website and those who profit from it.

2. Reddit users hate business:
The S-1 document mentions r/wallstreetbets 5 times, naming it as a risk. Which is awkward. Causing bad relations with the subreddit that famously pumped up the Gamestop stock and cost investors billions, is perhaps not the wisest move. How does r/wallstreetsbets respond? Well...

3. Users have suicided the platform before:
Reddit is highly dependent on its users. The same users that’ll flip the script if notice Reddit selling out their platform by grooming it for investors. These guys are famously anti-business and it’s hard to put ads on Reddit because of this.

4. 18 years in, still not profitable:
Today, they’re at a $717 million loss. Why would somebody invest in this? Tech investing works on a different wavelength - say Reddit hits its first profit in 10 years; then that’s a healthy and worthwhile outcome. But that would mean reforms with the most stubborn community on the internet.

✦4 Reasons for Reddit to Boom✦

1. At the end of the day, Redditors are Redditors:
Reddit has been around for 20 years because users simply won’t leave. No matter how much users have complained in the past, they come back to the platform. 100K active communities, +1B posts and 73M active users don’t disappear overnight - they’re emotionally invested.

2. Despite negative profits, Reddit is improving:
In 2023 their net income was a negative $91M, which is shit when you look at it alone. But then you realize that it’s a 60% improvement from the loss of $159M in 2022. Which is fucking baller, if you missed that part. Their total revenues are also improving at a fantastic rate - $804M in 2023, a 21% improvement from 2022.

3. Simple problems:
Reddit mostly losing money to huge investments in R&D (research and development). They spent $438M on R&D last year - which is 52% of all the money they make.

So the majority of spending on one thing, and can become optimized as long as they’ve got brains and money - which the stock market debut is supposed to solve.

4. Reddit is a data goldmine
These days, data is a currency, and Reddit holds some of the most valuable data on the internet - it’s a precious asset as a search engine and an AI training model.

Remember: +1B posts from 100K communities - big, big, big. Users make 35 million searches on Reddit every day. It’s a search engine in and of itself. Plus, putting “Reddit” at the end of a Google search is getting super common as Google’s search results are declining in quality. And despite competing with them, Google spends $60M per year with Reddit in a data licensing deal that lets Google use Reddit content to train AI.

✦The Point? Money Makes Innocent Friendships Awkward✦

The awkwardness has already begun. This week, Reddit made an unorthodox move leading up to its IPO: they invited power users & mods to buy shares early: 75,000 shares of its IPO have been reserved for dedicated community members. Giving social media users the same priority as an institutional investor was until this point unheard of.

But not everybody is stoked about this. Reddit is famously a left-leaning anti-business platform that’ll rage at the smallest whiff of being sold out. And so, some are calling it a pyramid scheme scam, and some see it as a gesture of giving back to the community that upholds Reddit.

But as always, time will tell.

✦✦✦

Reddit says:

King says:
“Buying simply for the ride.”

✦Mini Stories✦

-Floppy Discs Are Popping Again, SBF, Diddy Cancellation-

💾 The Booming Scene of Underground Floppy Disc Music
Vinyls? Too late, normie. We’re doing floppy discs now. In a complete 180 from being inches from extinction, Discogs.com shows over 500 floppy disc music releases in 2020 alone, which is more than the 80s, 90s, and 00s combined.

Floppy Totaal started as a festival in Rotterdam back in 2014, but with much support from the community, it is now what they call a “research project that investigates the reuse and repurposing of ‘outdated’ technology as a cultural phenomenon.” Last year Floppy Totaal published its first book: Floppy Disk Fever: The Curious Afterlives of a Flexible Medium.

But floppy has a completely unique problem from CDs and vinyls: nobody’s making new floppy discs. So, obtaining them gets expensive: 2$ for a single disc. It seems like a little, but remember they’re 1.44MB - that’s 1388$ per GB. You can get a 512GB iPhone 15 for less.

👮‍♂️ Sam Bankman-Fried is Giving Crypto Advice to Prison Guards 
What’s SBF’s prison day-to-day like? Hard to know. We only have the cute stories his prison mate G-Lock told about Sammy eating PBJ sandwiches, not showering, and teaming up with other inmates.

Other than that, people have been scrambling to find info on how crypto’s big reject is doing since his 100-year fraud and conspiracy sentence after the FTX collapsed.

Yesterday, scramblers rejoiced at another cute tidbit that leaked from SBF’s Brooklyn cell. A NYTimes article covering SBF’s grand plan to reduce his 100-year sentence to 6.5 years shortly mentioned that he’s in a jolly good mood in there and is giving prison guards investment advice.

Specifically, he’s telling them to buy Solana.

🙊 Diddy is, Once Again, Accused of Sexual Misconduct.
Sexual harassment accusations keep piling up on Diddy one after the other. This flood of accusations and lawsuits followed his ex-girlfriend Cassie’s lawsuit quickly settled only a day after going public. 

This time, producer Lil Rod is suing Diddy for unwanted sexual contact and forcing him into sex acts with prostitutes. Here are the accusations:

  • Lil Rod says Diddy grabbed tried to force him into having sex with another man, claiming it was "normal in the music industry."

  • At a listening party at Combs's house, Lil Rod says he was given tequila shots with drugs, passed out, and woke up next to a sex worker.

The lawsuit is 73 pages long, with photos and names of not just Combs but also Universal Music Group and its execs. Combs's lawyer calls the lawsuit a lie, of course. They're saying Lil Rod is just looking for a $30M payday with made-up stories. The court papers even had a typo at first, saying $30 billion instead of million.

✦Quick hits✦

• Ye and Ty Dolla $ign’s ‘VULTURES 1’ is still no. 1, two weeks after release.

• Also, Ye says that Adidas is “raping” him with 50 years of business experience as they’re suing him for $250 million, despite there not being any evidence that they’re actually suing him.

• Elon Musk tweets that the new Tesla Roadster will include “~10 small rocket thrusters arranged seamlessly around the car. These rocket engines dramatically improve acceleration, top speed, braking & cornering. Maybe they will even allow a Tesla to fly.”

• Microsoft inked a deal with France’s Mistral AI, OpenAI’s rival.

• Apple is reportedly shutting down its Electric Vehicle project after 10 years. The reason was that their idea for charging the car was “unworkable”.

• Freddie Mercury’s legendary London home is for sale for the first time since he lived there.

• Millie Bobby Brown might be the most influential Gen Z influencer ever.

• Tyler Perry bails on $800M studio expansion after seeing OpenAI’s video generator Sora.

• Instagram is planning a ‘Friend Map’ feature, that’ll let you track friends’ locations. Which is nasty.

• Pornhub got sued by the state of Texas which claims that they’re ignoring the age verification law.

• Beyoncé’s “Texas Hold ’Em” finally goes No. 1 on the Billboard Hot 100 after debuting atop the Country Songs chart

THE DEPTHS

/Advertising

Inside the World’s Prettiest Library, with Waldsassen Abbey

In the 1800s, Waldsassen Abbey and its amazing library was turned into a cotton factory. Up until that point, it had lived nearly 700 years as a holy place for nuns who dedicated their lives to godly contemplation. Thankfully, a group of Cistercian nuns bought it back and began restoring the Abbey to its former glory.

And in glory, it stands.

From the outside looking in, however, it’s not that epic. Sure, it’s nice but the library is on a different level. It was built in 1724 by Karl Stilp, who adorned the walls and banisters with his masterful linden wood carvings.

Not only the books, but the library design in itself tells a story. Across the library, you can see wood-carved statues of allegorical figures that represent vanity, ignorance, and boastfulness.

Waldsassen also holds one of the world’s greatest rare and antique book collections, some of which are bound in pigskin and calfskin.

 

✦✦✦

King says:
“Imagine the smell.”

✦LINK HELL✦

Hey! You just finished Issue 010. You’re great. See you next time.
/Salin