Reddit, meme stocks and an IPO

Make Me Smart March 14, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kai Ryssdal 

I just do what I’m told. I join the link in the thing, and you know, I’m just the talent.

Kimberly Adams 

Hello everybody, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kai Ryssdal 

You know, it’s funny. I spend so much time sitting in front of a microphone sometimes I forget I’m sitting in front of a microphone, which you know, whatever. I’m Kai Ryssdal. Thank for joining us on this Thursday, I believe it is March the 14th today.

Kimberly Adams 

Yes, today we’re going to listen back to some of the big news stories of the week. We’ve got some audio clips lined up, so let’s hear our first one.

Summer Lucille

“When I got on TikTok in 2022, it changed my life forever. I was able to gain followers. I was able to connect with my community. I was able to grow my business, and upscale to a warehouse of 15,000 square feet. Get a brick and mortar into the mall location. It changed my life forever. I have people flying in from California, the UK, Seattle, New York, just to visit my store just because they heard about me from TikTok.”

Kimberly Adams 

And there is a perfect example of some of the most effective lobbyists that TikTok has. So, that was TikTok content creator Summer Lucile talking on CNN about how TikTok has helped her grow her business and why she is against banning the platform, which is something that the House of Representatives has kind of sort of voted to do. This week, they voted to pass a bill that either would force TikTok parent company ByteDance to divest TikTok, at least the US operation of TikTok, or face being banned from US app stores. And all sorts of TikTok content creators have been voicing their opposition to a ban, many saying it’s going to destroy their small business or their careers as an influencer or creator. TikTok is spending millions and millions of dollars lobbying Congress on this issue, and yet it was a pretty overwhelming pass. And you know, I should mention here that there is, and we’ve said it before, there are a lot of real national security concerns around TikTok. There’s a lot of privacy concerns around TikTok. But after passing the House yesterday, the bill that would force TikTok to split moves on to the Senate next. Biden has already said he’s going to sign it, but TikTok is definitely not taking this one line down.

Kai Ryssdal 

No, for sure not. Although the odds of the Chinese government or whoever actually controls TikTok or ByteDance, as the case may be, selling TikTok to a former Secretary of the Treasury or any American I think is zero. Maybe less than zero.

Kimberly Adams 

And I mean, obligatory disclaimer here that TikTok swears up and down that they are not giving the data of Americans to China. That is what they say.

Kai Ryssdal 

Right. Right. I actually think, by the way, I don’t think it’s a data thing. I mean, yes, maybe it is a data thing. But I think it’s an algorithm thing. I think it’s we don’t know if, whether maybe kind of sort of somehow somebody’s going to manipulate the algorithm to start showing things that are potentially destabilizing. That’s my play. And you know, I mean, what the hell do I know. But that’s, you know, I don’t know.

Kimberly Adams 

I mean, all the above can matter. You know?

Kai Ryssdal 

Right. Yeah. Right. Totally. Totally. All right, next clip. Here is a woman by the name of Ellen Pao. She’s the former CEO of Reddit. She was on CNBC a couple of days ago to talk about Reddit’s upcoming initial public offering. Reddit, of course, being the, you know, voted up voted down social media platform. And she was asked, which is really good question by Andrew Ross Sorkin on CNBC, what the company’s path to profitability looks like, here’s what she said.

Ellen Pao

“It’s a difficult one. It requires selling your users’ data. It requires limiting the content to content that advertisers are comfortable with. It’s kind of counter to the free-for-all that Reddit has been for so long, and that the users have rebelled against restricting. So, it’s going to be a tough path. And I think that having the public market watching everything that you do is also hard.”

Kai Ryssdal 

Yeah so, a couple of things. First of all, did you hear that like hitch in her giddyup as she said “free-for-all,” right? I mean, Reddit is a free-for-all, and if you’re the person running this company, that’s a real challenge, right? Because it is kind of been the wild, wild west in a not very good way in a lot of cases, right? There’s been a lot of abuse, a lot of really problematical content on there, but it’s company that give or take is going to be worth six or eight billion dollars. They’re trying to raise you know, three quarters of a billion. $750 million in this IPO. Company is also, and this is props to them, going to reserve some of the shares in this initial public offering for users and for moderators, which gives them the chance to get in before the big institutional investors get in, so that they get some of that first day pop, instead of only being able to get in after the first day pop, which you usually see on our initial public offering, right? Which is, which is kind of a good thing. The other thing to mention here, and props to Courtney for putting this in the prep. Reddit was the origin location of a lot of the meme stock volatility in 21 and 22, AMC, and GameStop, and all of that jazz, and it will be really interesting to see how that plays out on the platform once it becomes a publicly traded company. Are they going to, like do some stuff to the company? I don’t know. I don’t know.

Kimberly Adams 

Are the meme stock Redditors going to meme stock Reddit?

Kai Ryssdal 

Right. Right. There would be something very, very meta about that. Not that throwing another, you know. See what I did there? Anyway.

Kimberly Adams 

I did. Good job. All right, moving right along, here is the next clip.

Rick Dreiling

“Now let’s turn to Family Dollar. Here, persistent inflation and reduce government benefits continue to pressure the lower income consumers that comprise a sizable portion of Family Dollars’ customer base.”

Kimberly Adams 

That was the CEO of Dollar Tree, Rick Dreiling, on the company’s earnings call. Earnings analysts call whatever you want to call it this week because Dollars’ fourth quarter financial results were worse than expected. And much of the blame went to the performance of the company’s Family Dollar chain. Now, both of these chains, Family Dollar and Dollar Tree tend to be a bit overrepresented in lower income communities. And so, a lot of people look at how these stores are performing to see how people at the, you know, bottom end of the income scale, are faring in this economy. And so, the company announced it’s actually going to be closing nearly 1,000 stores over the next several years, most of which will be Family Dollar locations. And if you’ve been listening to Marketplace for the last few years or so, you will know that in many communities, the only type of grocery-ish store in lower income communities are Family Dollars or Dollar Trees. And they’re not always, you know, the best options for the most helpful food options. But they are the only option, as more and more grocery stores have retreated. And so, this is going to have a significant impact on a lot of these areas that the USDA refers to as food deserts.

Kai Ryssdal 

Yeah, totally agree with everything you said. Yeah, the grocery thing is really troubling actually when you think about it.

Kimberly Adams 

Yeah. I will say that there are more options for people who receive SNAP benefits to get grocery delivery now than there used to be. It’s not, you know, as easy it is for people paying cash or credit or whatever, but there are a few more options. But again, when you’re thinking about distance that gets to be an issue, like if you’re 40 miles from the Walmart or 40 miles from the Amazon warehouse. You know, are you still going to be able to get any kind of savings there? I don’t know.

Kai Ryssdal 

I think we do know, and the answer is no you probably won’t, right?

Kimberly Adams 

I don’t know yet.

Kai Ryssdal 

All right. Well, we’ll see it checks out. Last piece of tape for today. Matthew, a listener out there. And thank you, Matthew, for listening recommended this one. I should have picked up on it, but here we go.

Cole Brauer

“Every day was a challenge. Every day was an experience. Every day was the best day of my life. And that is exactly what the finish was also.”

Kai Ryssdal 

I have mentioned a couple of times on this podcast, this young American woman I was following on Instagram who was sailing around the world. Her name is Cole Brauer. She finished this past week; I think she finished on like the sixth or the seventh of March. She came in second on a solo around the world race. She’s become the first woman to race solo around the world. I told you about her Instagram feed. It was amazing and remarkable and just wild. She finished and came in second in that race out of 16. I think something like 25-ish people started. A bunch of them got dismasted and had breakdowns and all this jazz. Anyway.

Kimberly Adams

Dismasted?

Kai Ryssdal

Yeah, the mask broke.

Kimberly Adams

Wow.

Kai Ryssdal 

Yeah. Yeah, it was wild. There was another guy in the race who I also followed. I went down the sailing rabbit hole as happens I suppose with social media, which is to get back to the algorithm. That’s what happens. Yeah, yeah. This guy was selling in the middle of night, coming up the east coast of South America in a storm, and his mask broke and when you’re on a you know, 50 foot sailing boat in the middle of the night and a storm and your mask breaks, you’re in a world of hurt and you had to call Coast Guard and emergency beacon and get evacuated and picked up by a different ship. Anyway. Cole Brauer finished. She’s fine. But it’s cool. It was just cool to watch this person do this. It was just great. And we’ll put a link to her stuff on the show page because it was amazing.

Kimberly Adams 

Good for her. Congrats Cole. Yeah. Well, that is it for today. Please join us tomorrow for Economics on Tap, which will be the cherry blossom edition. We are nearing peak bloom here in DC, and I was on my way to take Jasper to the vet today and saw a lot of the magnolias blooming and a couple of the early cherry blossoms blooming. He’s fine, by the way. He’s got a runny nose, and I was worried about it, but they said it’s okay.

Kai Ryssdal 

Wait, how do you know when a cat has a runny nose?

Kimberly Adams 

When there’s snot dripping down his face. How do you know when anybody has a runny nose? Anyhow, we will not have snot tomorrow for Economics on Tap. It’s going to be the cherry blossom edition. There will be decor. There will be theme. There will be themed cocktails, and if you want to know what themed cocktail I will be having for the cherry blossom party it’s in the Make Me Smart newsletter, so you can check that out. You should subscribe, and if you want. Kai. Longsuffering sigh from Kai. The YouTube livestream starts at 3:30 Pacific, 6:30 Eastern. Don’t miss out

Kai Ryssdal 

Make Me Smart is produced by Courtney Bergsieker. Audio engineering today by Drew Jostad. Ellen Rolfes writes our newsletter. Thalia Menchaca is our intern.

Kimberly Adams 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital

Kai Ryssdal 

Alright, here’s what it is. Obviously they have mucus. I just don’t think I ever thought of cats as having mucus. Honestly. Right? I mean, I get it, but you know?

Kimberly Adams 

He’s also really old. Jasper’s almost 15. You know, so.

Kai Ryssdal 

But he’s fine, right? He’s fine?

Kimberly Adams 

As far as I know.

Kai Ryssdal 

All right. Good.