u/Traditional-Year3847

I already have $RDDT stock in my portfolio since early days.

I have now recently bought $RDDT June 16 2028 $380 calls and June 2027 $300 calls.

Here is a summary of my DD:

Pros:

1. Reddit has had stellar earnings every time since it went public, posting an average YoY revenue growth of ~65% every single quarter.
2. Reddit has a forward PEG ratio of 0.54x which is lower than 55% of its industry.
3. Reddit has had an average YoY FCF growth of 325.73%. How many profitable companies are out there that have these FCF growth rates consistently?
4. Reddit has historically only been available to use in mostly English speaking countries. Over the past year, it has expanded its AI-powered machine translation and search to 23 languages. The platform features automatic translations for both posts and comments, helping open up what was previously a primarily English-centric network to millions of users across Asia, Europe, and Latin America. This literally means that the growth potential has just started as all the previous amazing growth they have witnessed was only limited to english speaking countries TAM. Advertising revenue will most likely be their biggest growth driver.
5. As more and more people tend to seek LLMs to ask most of their questions, there is a really unique advantage Reddit will have in the future as humans will try to seek more human conversation. Even to this date, many people have the tendency to search the answer to certain life and day-to-day questions on Reddit specifically. Just consider yourself reading this on Reddit instead of in chatgpt. While Reddit already has some small licensing contracts with two LLMs, the CEO has said he actually wants to keep most of its data proprietary. This is extremely smart, because as LLMs learn more and more, they will still not be able to provide the data on Reddit to users, which will keep forcing users back onto the platform for those highly sought questions. The scarcer the data, the more that data will be worth. So whether the plan for the CEO is to build or have the option to build some sort of an LLM in the future, or whether the plan is to license it for a higher price in the future, I believe the CEO is cooking something.
6. And finally, my 10-YR DCF Valuation (attached screenshot):
   • Base case price: $322-$440
   • Bear case price: $233-$272
   • Bull case price: $390 - $466

Note: I didn't even factor in growth of Data Licensing nor for the new geographies. This is purely based on macro, past trends, and management estimates.

Cons:

1. A common point of debate is the high share based compensation. Personally, I think it is normal and should be encouraged in a high growth company in order to maintain the growth and is pretty normal in tech and AI companies. But I know it is one of the reason the stock is not "liked" on wall street.
2. The amount of bots is another con. Though the CEO has mentioned it is something they continuously work on, I do consider it a con. I have to say though, I believe all social media platforms are suffering from bots. It's just a bit harder to distinguish on Reddit which is an issue when you seek an unbiased answer to a question.
3. Another point of debate on wall street is the declining growth of DAUq in some quarters. Though they still have positive growth, it is at a declining rate. However, I personally believe this is normal and logical as eventually DAUq can only grow with the population growth rate. What I believe matters more is the growth in ARPU. Rest-of-World ARPU grew 44.3% while U.S. ARPU grew 56% in FY2025A, which caused Rest-of-World revenue to grow 93% while U.S. revenue grew 70% in FY2025A. What is is very interesting is that U.S. ARPU In 2025A was $10.79, while Rest-of-World ARPU is still at $2.31 which suggests there is still a lot of room to grow considering Rest-of-World advertising has a lot of untapped potential. I believe Wall Street is overlooking the bigger picture here by focusing on user rates rather than the hidden drivers.

Got 4x $2,100 $SNDK puts expiring tomorrow as a hedge for today’s long strategy for cheap with the expectation of them going to 0. This is how it closed. Probably a glitch but would be fckn amazing if it happened. Pray for me.

Can’t wait for when its time for puts