Shawn O’Malley and Daniel Mahnke discuss Reddit as a potential addition to their intrinsic value portfolio. Shawn pitches Reddit, explaining its unique community-driven platform, business model including advertising, premium memberships, and data licensing, and its recent IPO. They delve into the user revolt over API changes, the potential of AI in advertising and data analysis, and Reddit's reliance on Google search. Shawn presents a valuation model, projecting future growth and profitability, while Daniel offers a more cautious perspective, emphasizing the uncertainties and risks associated with the company's unproven business model. They conclude that while Reddit is not yet a compelling investment, it's a company to watch closely, especially if the stock price declines further.
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