Using Reddit For Stock Analysis: An Example
Don't Ignore The Power Of Communities
Dear investor,
Great investments start with great insights. I’m a huge proponent of going beyond the headlines and finding those insights where they’re least expected - through customer reviews, employee chatter, competitor moves, and even online communities.
There are many ways to skin this cat.
Today, I’m going to show you one of those ways.
Reddit's r/pelotoncycle subreddit, established in 2015, has been a hub for Peloton users and enthusiasts to share experiences, discuss products, and provide feedback.
Peloton, known for its interactive fitness products (or just being a bike with an iPad), has a dedicated community on Reddit. This subreddit serves as a hub for users to share experiences, discuss workouts, and provide feedback on Peloton's offerings.
By analyzing discussions from this community, investors could have identified early indicators of Peloton's potential growth, especially during the COVID-19 lockdown period - and even before that.
In the years following its creation, r/pelotoncycle saw a steady increase in membership and activity. Users frequently shared their experiences with Peloton products, discussed workout routines, and provided feedback on the company's services. This growing engagement reflected a dedicated and expanding user base, signaling increasing consumer interest in Peloton's offerings.
Indicators of Increased Demand During Lockdown:
During the COVID-19 pandemic, as lockdowns were implemented globally, the subreddit experienced a surge in activity. Users discussed longer delivery times due to high demand, shared tips on setting up home gyms, and expressed enthusiasm for Peloton's virtual classes.
For instance, a daily discussion thread from July 20, 2020, addressed the influx of new members and common questions regarding delivery and setup, indicating a significant rise in new customers. 👇
In an earlier Daily Discussion Thread from Dec 30, 2019 you clearly saw the strong sense of community among Peloton users, calling themselves "Pelotoners" and "PeloYogis":
Such terminology shows a deep engagement and shared identity within the user base, which are positive indicators for brand loyalty and customer retention.
This collective positivity and sense of belonging suggest a robust and active community, which can be a valuable asset for the company's growth and investor confidence.
Peloton PTON 0.00%↑ may have been a hype stock with questionable fundamentals, but smart investors who spotted the early signs could have made substantial profits.
The indicators were there for those paying attention.
Conclusion
Active Reddit communities often discuss emerging trends, product launches, and user experiences before they become mainstream.
By monitoring such discussions - which are often ignored by Wall Street analysts, investors could have identified increasing demand and user engagement with Peloton products prior to the significant growth observed during the COVID-19 lockdowns.
Lesson of the day: Dive into niche communities like Reddit, Discord groups, or specialized industry forums. Look for first-hand reviews or discussions on new products. Keep your eyes and ears open. Online forums can give you an edge - if you know what to look for.
I’m going to provide more examples/methods in the coming articles. Stay tuned.
Until the next issue. 👋
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Disclaimer: This analysis is not advice to buy or sell this or any stock; it is just pointing out an objective observation of unique patterns that developed from my research. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice.
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