Reddit's Stock Is Suddenly Surging: The Earnings Beat and Why I'm Not Buying the Hype

So Reddit dropped its third-quarter earnings, and the spreadsheet jockeys on Wall Street are popping champagne. Shares are up. Revenue beat expectations. Net income went through the roof. CEO Steve Huffman is probably taking a victory lap around his office, high-fiving the ficus plant.

On paper, it’s a masterpiece. Sales jumped 68%. They pulled in $585 million when the nerds with calculators only expected $546 million. They even guided higher for the next quarter. It's the kind of report that gets you a fawning segment on CNBC—Reddit shares rise on earnings beat, strong forecast—and a pat on the back from investors who just want to see the little green arrow go up.

I can just picture it: some junior analyst, eyes bloodshot from staring at Excel, sees the 8% after-hours jump and thinks, "They did it. The chaotic, meme-infested heart of the internet is finally a real, grown-up company."

But I've been doing this too long. I know a magic trick when I see one. And right now, everyone is so busy watching the magician’s right hand—the explosive revenue growth—that they're completely missing what his left hand is doing. Or rather, what it’s failing to do.

The American User is Getting Bored

Let’s get right to the ugly part, the little line item buried under all the good news: logged-in daily active users in the United States. You know, the people who actually post, comment, and generate the content that Reddit sells to Google for its AI. The people who see the most valuable ads. The core of the entire damn business.

Their growth is slowing. Again. For the fifth quarter in a row.

It’s up a measly 7% year-over-year. That sounds fine until you realize it was 12% the quarter before that, and even higher before that. It’s a clear, undeniable trend. The most valuable audience on the planet is slowly losing interest. The well is running dry.

When asked about this, Huffman gave the most boilerplate, PR-tested answer imaginable: they’re working on "making sure there are no barriers" and that the "biggest driver of retention is following subreddits that are relevant to your interests." He finished with the kicker: "It's not rocket science."

Give me a break. "It's not rocket science" is C-suite code for "We don't have a new idea in our heads." It's what you say when you're just polishing the same old engine, hoping it runs a little longer before it seizes up. Offcourse they need to make it easier to find subreddits; that’s been the problem for a decade. The real question is, why are people who know how to use Reddit, the power users, not growing at the same clip?

The company’s solution? Chief Operating Officer Jen Wong says they’re now running "performance-marketing campaigns" to attract users overseas. Translation: They’re paying for growth. They’re running ads in countries where Reddit isn't a household name to juice the global user numbers and distract from the stagnation back home. It’s a smart business move. No, 'smart' isn't the right word—it's a necessary one, because the organic growth engine in their core market is sputtering.

But what happens when that firehose of marketing cash runs dry? What happens when you’ve signed up every person in Germany who wants to argue about soccer and you’re still left with a slowing American user base? They’re running out of road, and honestly...

And Now, the Degens Arrive

Just when you think the story can’t get any more detached from reality, the crypto casino kicks down the door. A crypto exchange called Bitget, based out of the Seychelles of all places, just announced they’re listing RDDT perpetual futures.

For those who don’t speak the language of financial nihilism, this means you can now bet on Reddit’s stock price 24/5, with 10x leverage, using a stablecoin as collateral.

This has absolutely nothing to do with Reddit’s quarterly earnings, its user growth, or its data licensing deals. It’s pure, uncut speculation. It’s treating a company’s stock not as a piece of ownership in a business, but as a poker chip. Reddit, the company, is trying to build a sustainable advertising and data business in New York City, while RDDT, the stock ticker, is now a gambling token being traded by anonymous accounts in a completely different universe.

This whole thing is the perfect metaphor for the modern market. The actual health of the company has become secondary to the narrative, the meme, the sheer speculative frenzy. Bitget calls this part of its "Real World Asset" offering, which is the most hilariously ironic branding I’ve heard all year. There’s nothing real about it. It’s a shadow-market built on a symbol of a business, completely divorced from the business itself.

Are we supposed to believe this is a sign of a healthy, mature company? Or is it a sign that Reddit has simply become the next hot thing for the crypto crowd to play with until they get bored and move on to the next shiny object? Maybe I’m the crazy one here, but when the degens show up to the party, it’s usually a sign that the party is about to end in a spectacularly messy way.

A Hollow Sugar High

Let’s be real. This was a great quarter for Reddit's accountants and for anyone who bought the stock last month. But it feels like a sugar high. The company is masking a fundamental weakness in its most important market by spending money to acquire less-valuable users elsewhere. The core product isn’t evolving in any meaningful way, and the CEO’s answers are straight out of a corporate bingo card. Meanwhile, the stock itself is becoming a speculative plaything in the crypto wild west. They’re putting on a great show for Wall Street, but the foundation is cracking, and no one seems to care as long as the numbers keep going up. For now.