Reddit's stock rises on new partnership with NFL, NBA, MLB, PGA Tour and NASCAR

By James Rogers

Reddit clinches deals for video content and player engagement with major U.S. sports organizations

Shares of Reddit Inc. ended Monday's session up 5.3% after the social-media platform announced a partnership program with five major U.S. sports organizations.

Reddit shares (RDDT) outpaced the S&P 500 index's SPX gain of 1.1%.

The deals with the NFL, NBA, MLB, PGA Tour and NASCAR mean Reddit users will get access to video highlights from games and tournaments; question-and-answer sessions with players, known on Reddit as AMAs, or "Ask Me Anything"; and behind-the-scenes videos, Reddit said in a statement Monday.

Related: 'So far, so great' for newly public Reddit, says moderator-turned-investor

Reddit said that users will also get "special content" posted by the leagues throughout their seasons, as well as during major events such as the Super Bowl and NBA All-Star Game.

"Reddit advertisers can align their brands to these communities and content experiences," the company added, noting that FanDuel, Samsung, Ford Motor Co. (F) and Volkswagen of America did this during an initial test with the NFL during the 2023-'24 season.

"The major sports leagues are some of our most engaged Reddit Pro users and best-in-class examples of the power of engagement within Reddit communities," Reddit said. Reddit Pro is a free suite of tools for businesses designed to help them establish and grow "a meaningful organic presence" on the platform.

Related: Reddit-OpenAI deal highlights demand for social-media platform's data

Reddit shares have risen 35.1% since their closing price on the day of the company's initial public offering on March 21. The IPO priced at $34 a share, at the high end of its target range, and ended the first day's trading at $50.44.

Reddit's first quarterly results as a public company sent the company's stock surging on better-than-expected revenue and a narrower-than-expected loss.

Analysts have also said there are international and data-licensing opportunities ahead for the social-media platform.

Related: Reddit poised for AI and user growth, analysts say, as they initiate coverage

In May, Reddit and OpenAI announced a partnership to bring the social-media platform's content to OpenAI's ChatGPT service. OpenAI is also gaining access to Reddit's Data API, or application programming interface, and will become an advertising partner. As part of the deal, Reddit will also offer new features powered by artificial intelligence to its users and moderators.

Reddit's second-quarter results will be released after market close on Aug. 6.

-James Rogers

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07-22-24 1734ET

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