The Comments Section
Every financial market exchange is someone telling someone else: "you're wrong." Humans trading with humans. Humans trading with bots. Bots trading with bots. Each side of every transaction thinks it's winning an argument. A lot of the time they're arguing about different things or across different time horizons. A lot of the time who wins boils down to whose loudest — it's easier to buy or sell a story than actually be right. Financial markets have that in common with the comments section of any webpage or app: all pits of obnoxious, toxic screaming.
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Replies to social media posts or articles or anything available on the internet are famously radioactive. They've been blamed for many modern ills. Some toxicity is a feature. Rage drives engagement. Engagement drives profits in many corners of the web. Part of the challenge of operating a modern digital business is parsing authentic activity from rage bait and bots.
Walk this dark view of the web to its most grim end and you arrive at "The Dead Internet Theory" — that most internet traffic is just bots tricking algos into thinking they're authentic engagement to keep the party going and make people mad.
A few steps before that dystopia is that big "social" media companies turned out to be more like just media companies. They aren’t really “social.” Users consume "content" rather than interact with their friends or communities. The digital landscape reorganized around consumption not interaction. This began more than a decade ago. It's where all the big "social" media companies landed. Everyone except Reddit.
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Reddit went public in 2024. It didn’t have much of a business compared to the other digital media companies — Facebook, Tik Tok, Google. It didn’t even crack a billion dollars of revenue in 2024. Facebook earned one Reddit’s worth of revenue every two or three days that year.
Reddit didn’t try to compete head-on. It counter-positioned itself as "the front page of the internet.” It went “social” rather than “media.” It carved out a corner of just being the comments section. Just people interacting with their communities. It preserved some of the spirit of the old internet -- the one filled with message boards and forums. It built in authenticity in a way the other media platforms didn't. It kept itself from being overrun by a fetid, bot-fueled plague by having users moderate its forums and user-driven ratings.
It's not perfect. There are still plenty of bots and rage bait. It's just done a better job of separating authentic engagement from in-authentic than most of the other big platforms.
Having a not-dead community on the internet, it turns out, has value. Many of Reddit's communities hum with engagement from real, live people.
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That’s a harder business. "Lagging" isn't strong enough to describe how far behind Reddit is compared to peers. Facebook and Reddit are about the same age. Facebook launched in 2004, just a year before Reddit. Today, it's 30 times bigger. Reddit's struggled to figure out how best to turn communities into business to support its existence as a public company. Eventually, like all the other digital media companies, it landed on ads.
Reddit hasn't been great at this. Its average revenue per user (ARPU) in 2025 was $6. Facebook hit that mark all the way back in 2013. Over the next decade, Facebook went on to grow that by 22% per year on top of growing its number of users. Part of the shareholder dream for Reddit is "how do we do that?"
So, how do you do that? How do you reverse engineer a decade of top tier growth?
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There's a model for this. There's a roadmap. There’re also the people that did it before. Reddit hired one of them: Maria Angelidou-Smith. She joined Reddit as Chief Product Officer in November 2025. She also happened to helm various product roles at Facebook between 2013 and 2022 — that same era when Facebook cooked 22% growth. Her job is to capture some of that magic and deliver it to Reddit.
Reddit hasn't been asleep. It already grew ARPU 42% in 2025. Looking ahead though, that's the model: grow ARPU. Given its high engagement and low starting point, it has a lot of value it can offer to customers. Maria and the rest of the exec team are focused on this. Given the company's improving performance and free-falling market expectations, the shares offer a compelling chance to tell the rest of the market "you're wrong."
Disclaimer: None of this is investment advice. It's meant to illustrate ways LCM thinks about investing. Things that LCM decides are good investments for LCM and its clients are based on many criteria, not all of which are covered here. Some or all of LCM's ideas may not be suitable for other investors. LCM does not recommend investing either long or short any position mentioned. LCM may own positions in some of the companies mentioned. Some of its ideas will lose money — investing entails risk. See full disclaimer here.