Reddit (RDDT), a series of message boards for just about every hobby, taste, or fascination imaginable, just made a new deal with the National Basketball Association (NBA). It also made one with the National Football League (NFL), along with several sports leagues, including golf and car racing, to draw interest to its platform. This sent shares surging nearly 7% in Monday afternoon’s trading.
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With the new arrangements, Reddit will be able to offer a set of video highlights from recent games, and can provide “Ask Me Anything” events for players and figures within the various sports.
Reddit, as noted by Jen Wong, the company’s chief operating officer, revealed that major sports leagues need a platform to connect with their audiences. Reddit’s bread and butter is providing such a platform, so the deals were a natural fit.
Early Results are Promising
For everyone who quietly dismissed Reddit out of hand as a useless stock that would go nowhere, a serving of crow may be in your near-term future. Reports noted that when other brands started using Reddit as a connection measure, solid results came back.
For instance, a major beverage brand that ran a Reddit campaign alongside “premium video content from the NFL” saw a surge in purchase intent of 11.3 points. Furthermore, brand favorability got a 9.4-point boost, while awareness increased by 5.9 points.
Is RDDT a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RDDT stock based on eight Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 51% share price rally since its IPO earlier this year, the average RDDT price target of $64.85 per share implies 6.08% downside risk.
