Why I added $15,000 to my RDDT position

Am I happy with being $50k down on RDDT? Of course not. But I see this also as an opportunity. It’s vital to understand two things: Why has the share price tanked? Does this change the investment case? The answer to 1 is one word: Google. With no new Google deal, RDDT’s Users are declining. The answer to 2. is No IMO. My reasoning is: - Google itself just lost $0.5 trillion - its worst ever day. This is because they are still working out how Search can make money in the AI world. Its AI Mode saved Search but is not monetised yet. Google now has negative cash flow. This is going to make it harder for RDDT to negotiate better terms with Google. - RDDT still has booming revenues and earnings, massive margins, no significant debt, huge cash flow and no new competition (other than AI). The management are not making rash deals and M&A. The fundamentals (other than Users which is due to Google) are intact. The investment case for RDDT is currently weaker due to the Google situation but the fundamental business model and Reddit’s moat are still in place. So what will happen next? Several scenarios: - a deal with Google will lead to explosion in the share price - Reddit will conduct a big share buyback, which will help prop up the share price and give us all a bigger stake in the company - RDDT could become an acquisition target. I don’t think it’s for sale but you never know - RDDT will adapt to not having the deal with GOOG as part of its bigger evolution in an AI world. This may include making RDDT login only. This can have many benefits (reduce AI scraping, increase ad density, grow signed up user base) but will require RDDT to ramp up product development and marketing to get Users signed up - so profit margins may come down initially. In summary, RDDT - like every other company in the social media, content, and tech space - is having to adjust to an AI world. The loss of $0.5 trillion in market cap in GOOG last week shows just how challenging this is - and that there are no quick fixes. I don’t think the business moat, fundamentals and investment case for RDDT has markedly changed. I think RDDT must be a 5 year holding. That’s how long it’s going to take to adapt to the AI world. But positive news is the top and bottom lines and financial position are immaculate so RDDT has the strength to adapt and fulfil its potential - and be a multi bagger. We just need to be patient.