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TIP861: Reddit (RDDT): Record Cash Flow, Collapsing Share Price w/ Kyle Grieve & Shawn O'Malley

Nov 15, 2026

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In today’s episode, Kyle Grieve and Shawn O’Malley revisit Reddit, a stock Shawn first pitched about a year and a half ago that has now given back nearly all of its gains after a one-day drop of roughly 25%. They’ll explain how Reddit makes money, why logged-in American users are worth far more than drive-by visitors from Google, and how Google’s AI answers turned Reddit’s biggest source of traffic into its biggest risk. Along the way, they look at Reddit’s network effects, its returns on capital, stock-based compensation and buybacks, Steve Huffman’s record as CEO, the move to a logged-in-only experience, and what the business is worth today.

IN THIS EPISODE YOU’LL LEARN:

(00:00:00) Intro

(00:03:09) Why Reddit fell 25% in a day despite 50% revenue growth

(00:11:29) How Reddit’s contextual ads differ from Meta’s targeted ads

(00:14:10) Why logged-in users are worth three times logged-out users

(00:26:57) How Google’s AI answers are cutting off Reddit’s traffic

(00:35:54) Why volunteer-run communities make Reddit so hard to copy

(00:37:02) How Reddit earns over 100% returns with almost no capital

(00:39:06) Why stock comp is Reddit’s largest bill

(00:51:10) What Huffman delivered as CEO, and the governance trade-offs

(00:57:00) Why going logged-in-only may be Reddit’s most important bet

(01:06:07) Valuation discussion

(01:06:57) What Reddit is worth today, and whether we’re adding

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

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Listen to Shawn’s first Reddit pitch.

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Check out our previous Intrinsic Value breakdowns: Meta, Snapchat, Trade Desk, Doximity, AppLovin.

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