RDDT - will inclusion into S&P500 make for good long term growth?

I have grown to love RDDT and return regularly to participate and find out information. I bought stock at IPO ish and then later a few buys, including over paying near the peak for one lot. The stock has been a crazy ride, and the AI systems mine RDDT for info, its been a battle of releases of news positive and negative, the insiders keep selling, AI keeps advancing, the management saying things on growth that might be good on one level but didn't help the stock investors who wanted a bullish future. IDK, overall disappointed and considering selling some to take chips off the table as I thought this would be another $META situation and I'd be rich AF. Thoughts? PE currently about 36 which is a bit rich.

2 comments held Reddit says 0 on reddit ↗

u/kinetic_honda 1 3 days ago

Reddit most certainly has a ton of growth ahead of it, but it will take a while for it to be the next "Meta"
u/DefinitelyNotTheFBI1 1 3 days ago

No one has a crystal ball, but there are some data we can point to: \- inclusion in the S&P500 doesn’t change the business fundamentals in anyway. It doesn’t change the underlying value or the company. It reduces the float availability because a solid % of its equity is locked up in 401Ks and index funds. The long term effects on that are probably positive, but thinking it as a short-term catalyst is generally unsupported based on historical performance of other companies following their joining of the S&P500. \- comparing the PE to current Meta is odd. Meta is a well-established company with a saturated user base and a mature ad product. Most RDDT investors’ value thesis anticipates significant growth in both user activity and monetization. A better comparison would be to Meta’s PE when it was valued at Reddit’s current market cap, or approximate # of quarters after Meta achieved profitability that Reddit is now. You can look at the charts as well as I, but that PE was anywhere between 1200 and 30.