Will Reddit's IPO Be Successful?

Kara Swisher and Scott Galloway discuss Reddit going public and whether the IPO will be a winner. They also discuss reactions and critiques from the Pivot fanbase on Reddit. Listen to the full episode wherever you get your podcasts.

Kara SwisherhostScott Gallowayhost

Feb 27, 20247mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Reddit’s High-Traffic Platform Tests IPO Market, Ad Model, And AI

The episode examines Reddit’s long-awaited IPO as a bellwether for the broader tech and social media IPO market. Kara Swisher and Scott Galloway discuss Reddit’s massive traffic, relatively modest targeted valuation around $5 billion, and its heavy reliance on advertising revenue. They highlight the platform’s controversial but potentially lucrative $60 million data-licensing deal with Google, positioning it within the broader AI data gold rush. The hosts debate whether Reddit will emulate high-growth giants or stagnate like Pinterest and Snap, with Galloway expressing clear interest in buying the stock.

IDEAS WORTH REMEMBERING

5 ideas

Reddit’s scale is under-monetized relative to its traffic.

As the third most trafficked site in the U.S. aiming for a ~$5B valuation, Reddit appears cheap compared to trillion‑dollar peers with similar attention share, suggesting room for significant revenue growth.

Advertising remains both Reddit’s core strength and vulnerability.

Like Meta and Google, Reddit relies heavily on ad revenue, leaving it exposed to macro ad cycles and market swings while still needing to improve ad products and yield per user.

Data licensing offers a new, AI-driven revenue stream.

The $60M Google deal shows how Reddit’s rich, user-generated content can be monetized for AI training, potentially diversifying income beyond ads if more such deals follow.

Community sentiment is a real business risk for data deals.

Power users and moderators are reportedly unhappy with licensing agreements, and alienating them could damage the very communities that create Reddit’s core value.

Reddit’s IPO will be a litmus test for tech offerings in 2024.

With markets buoyed by names like NVIDIA, investors are waiting for a breakout IPO, and Reddit or Shein could either reignite or dampen enthusiasm for new tech listings.

WORDS WORTH SAVING

5 quotes

This company is gonna go out supposedly at a valuation of five billion, and it's the third most trafficked site in the United States? Enough said.

— Scott Galloway

They've got a little bit of that AI spice on their meal.

— Kara Swisher

They can't be Pinterest and Snap that have kind of gone sideways and always end up being the little engines that couldn't.

— Scott Galloway

If they continue to be one of the most trafficked sites in the world, they can put an AI spin on this.

— Scott Galloway

I like him. He was really first on figuring out content moderation.

— Kara Swisher (on Reddit CEO Steve Huffman)

Reddit’s IPO timing and significance for the broader IPO marketUser base scale and traffic relative to other major internet platformsAdvertising-heavy business model and revenue dependenceData licensing deals, especially the $60 million Google agreementAI ‘spice’ and monetizing Reddit’s content for artificial intelligenceComparisons with other tech and social IPOs (Pinterest, Snap, Meta, Google)Potential valuation upside and investor sentiment around Reddit and Shein

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