Reddit Goes International – What Does It Mean for You?
Reddit, the social network that spawned the user-driven GameStop stock frenzy in February, achieved a market valuation of $10 billion last week as the platform announced it would raise up to $700 million in a Series F fundraising round led by Fidelity Management, CNBC reported. The company has already raised $410 million through Fidelity, CNBC stated.
In an announcement released on the Reddit website last week, the company said it achieved its first $100 million advertising revenue quarter this year, in Q2, which represents a 192% year-over-year increase. The company also revealed plans to expand internationally in the UK, Canada and Australia, with more countries to come. The announcement also stated that Reddit will focus on “new ways for communities to connect through audio and video.”
Reddit co-founder and CEO Steve Huffman said in a CNBC interview, “Video will be another big effort of ours… We’re looking forward here to another big evolution of Reddit. I think there’s a version of Reddit that’s even better watched than it is read.”
Recent Changes to Reddit Platform
Reddit has made changes in recent months, including the addition of an algorithm to better sort its “Best” listings for individual users, much like a Facebook feed does. The old “Best” function used upvotes, downvotes, the age of posts and the time a user spends within a community to deliver results. The new algorithm — which functions only on mobile — uses machine learning to recommend content based on the user’s interests and past content viewed, Reddit reported.
Additionally, the platform introduced multi-lingual capabilities with the app’s main interface, including buttons and menus, available in German, French, Portuguese, Spanish and Italian.
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Most recently — and significantly — Reddit has introduced a video feed button. Right now, it’s only available on mobile for iOS users. You can interact with videos by upvoting, downvoting, commenting, gifting awards or sharing the content, just as you can with other posts. But if you swipe up, you’ll see videos from related subreddits, TechCrunch reported.
Reddit Aims to Boost Relevance with Recent Changes
The platform’s new capabilities aim to help Reddit stand out in a crowded space. As of this summer, at least 17 social media platforms have 300 million or more monthly active users; Reddit stands at 15 on that list, according to Datareportal.com. Facebook, which has robust video features, leads the pack with 2.853 billion monthly active users. TikTok has 732 million, while Reddit has just 430 million.
Reddit made headlines this winter when a subreddit called r/WallStreetBets began to pump the price of so-called meme stocks — most notably, GameStop and AMC, among others. With the emergence of FinTok, creators on TikTok offering financial advice, retail traders now have another place to build their community. By making video features easier to use and by expanding international, Reddit can stay competitive amongst users interested in stocks — as well as the 130,000 million other active communities covering topics ranging from cooking to tech.
Retail traders now claim one-fifth of the equity volume of stocks in the U.S., according to a report from FinancialPost.com. Institutional investors believe that retail traders, and specifically, “the Reddit cohort,” could fuel “a lasting change in market patterns,” according to the report.
The influence of sites like Reddit cannot be denied. And CEO Huffman is aware of the platform’s power. He told CNBC that he’s had conversations with the U.S. Securities and Exchange Commission and the platform will continue to monitor manipulation tactics.
“Our responsibility at Reddit is for our users to be able to create community, to find belonging, to come together around their interests and passions,” Huffman told CNBC.
“Whether that’s stock trading and Wall Street Bets or more longer-term trading and … investing, you know, both are celebrated and both are welcomed at Reddit.”
For retail traders looking to get into investing as a hobby, the improvements to Reddit’s interface could make the app an even more user-friendly platform to learn the basics of stock trading and connect with others who share their passion.
However, it also opens the door wider for so-called “financial gurus” ready to dole out bad advice. As Reddit grows and expands internationally, users should exercise caution when it comes to using the platform to inform investment decisions and consult with a financial advisor before placing “bets” with money they may not want to lose.
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