Three Dots

Last Friday, Reddit had its worst day since its IPO, with a drop of almost 30%1. It didn’t matter that they beat their third-quarter estimates; what mattered most was a weak Q4 forecast and the quote from Reddit CEO Steve Huffman, “Our search referral traffic was down meaningfully in Q3, with the decline accelerating later in the quarter.” He also wrote, “During October, we have seen that search traffic has dropped by more than 1 million referrals on average per week.” There’s no baseline to understand whether 1 million referrals is a lot or a little, but there is no doubt a stock dropping 30% in a day is a lot. Reddit, which I am certain looks at the data daily, has seen this coming for years; hence their other announcements that shape a larger strategy: Testing a logged-in-only experience outside the U.S. Shutting down RSS feeds Shutting down the public API Moving data access to its Developer Platform, which makes all Reddit data access paid only. The Three Dots Are Pretty Easy to…