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Opinion | Reddit C.E.O. on GameStop and the Forum Shaking Up Wall Street

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woman

(SINGING) When you walk in the room, do you have sway?

kara swisher

I’m Kara Swisher. And you’re listening to “Sway.”

archived recording

Whether you are in the stock market or not, you have probably heard in the last 24 hours about GameStop. Shares of the struggling video game store became the target of millions of non-professional retail investors on a Reddit forum. Shares of the company have soared nearly 800% over the past week, driven by anonymous posts on the Reddit forum, WallStreetBets.

kara swisher

The forum boasts millions of members. But unlike some investment groups, this one’s made it into what feels more like a raid on Fortress Wall Street, except with memes, jokes, and songs to rally the troops. And that’s how GameStop or GME became a quote, “meme stock,” a viral sensation. Well beyond making money, which is really the point of investing, this was philosophical. Members of WallStreetBets noticed that several hedge funds were shorting the stock, meaning institutional investors were going to make huge profits when the stock price fell. That offended them. And that’s why Redditors wanted to keep GME high, to squeeze the big guy. And while Reddit is thought of as a community-run platform, there is a person at the top, CEO Steve Huffman. And I have a lot of questions for him.

Steve, how are you?

steve huffman

I’m doing great, Kara. How are you?

kara swisher

Good. All right, so let’s talk about the news right now. So obviously, subreddit WallStreetBets defines itself, “like 4chan found a Bloomberg terminal illness.” It’s a group of millions of users who have made front page news this week as they banded together and helped drive shares of the struggling video game retailer called GameStop. The stock shot up 1,700% in January and really just basically screwed short sellers like Melvin Capital and billionaires like Steve Cohen. When and how did you learn that Redditors were driving up the stock?

steve huffman

So this is a little funny. And I think I have a different maybe perspective than most because I hang out on WallStreetBets. It is, in fact, one of my guilty pleasures on Reddit. But I’m not a day trader. So I don’t read it super closely. So I’d seen GameStop being thrown around as one of the stocks that they were talking about and holding for months. And that was on the same level as Tesla, and Virgin Galactic, and some of the other kind of “meme stocks.” And then, over the last couple of weeks, I think around the inauguration, it started to pick up on the animosity between WallStreetBets and the short sellers because the analysts were saying, “Hey, it’s going to go down.” And WallStreetBets was becoming maybe possessive or defensive of GameStop. And I couldn’t honestly tell you the reason why. But then, that feeling has just escalated and escalated. And I think, at some point, they, rather than having engineered a short squeeze, from my perspective, it seems like they almost realized that that’s what they were in.

kara swisher

And let me explain. A short squeeze is what happens when you squeeze short sellers who are bearish on a stock pick and profit off of the stock losing value. And so the people on Reddit were trying to drive up the value, which means short sellers get screwed. And the stock keeps going up and up and up.

steve huffman

That’s right. So Tesla is the most famous example. Their valuation, I don’t know what it exactly is right now, but it’s astronomical. And so a very similar thing has been happening with GameStop, a very heavily shorted stock. And honestly, I think if we were just talking fundamentals, you could argue both sides of this. It’s retail video games. What’s the future of a business like that? On the other side, we’re in a pandemic. And video games are probably the MVP of the pandemic. And the new consoles have disk drives. So you could make an argument for both sides. I don’t think that’s the argument anybody’s making. It seems more personal than that.

kara swisher

GameStock was in huge distress before that. A lot of these companies that they’re picking — Tesla is a question of execution, how big it can get. In the case of GameStock, retailers have been troubled way before the pandemic. And it just accelerated things. And BlackBerry is on there. And we all know that history. When you talk about this subreddit being around for years, they’ve been doing these high-risk YOLO trades. You only live once. So it’s emotional. And it’s not just on Reddit. But Reddit, it seems to be the biggest community of them. But there’s financial influers really growing. They’re called finfluencers, if you can believe it. They’re dispensing stock advice on TikTok, on Instagram. Talk a little bit about that, the idea that this is an emotional thing versus a research thing because short sellers are just trying to take advantage of the distress these companies are in. And these people see something different, do you think?

steve huffman

I think there are multiple reasons somebody might make a decision like this. And I think WallStreetBets is more sophisticated than we might be giving them credit for right now. However, there are also a bunch of idiots there. And part of it is just for the fun of it. And from my armchair sociologist’s point of view, there’s a communal aspect to participating, to doing silly things. It’s the online stock betting equivalent of jumping off a cliff into a river. You wouldn’t normally do it. It’s really dangerous. But your friends are all there egging you on. So you do it. And I think we’re seeing that aspect because on WallStreetBets, the currency of WallStreetBets is a screenshot of your Robinhood account where something spectacular has happened. And it’s not always pretty.

kara swisher

So you show it off. These — when you win, you show it off. And when you lose, you show it off because it’s called “loss porn,” I guess. That’s one of the many —

steve huffman

That is the technical term, yes.

kara swisher

The technical term for it. I don’t — OK, all right, it’s been framed like a David versus Goliath story. And it has that energy within Reddit itself, the little guy beating the big institutional investor. But do you buy that narrative?

steve huffman

Overall, yes.

kara swisher

Why is that? Explain that.

steve huffman

Well, because we’re talking about David versus Goliath. We have on one side, WallStreetBets, retail investors, individuals. I don’t know their exact trade sizes. But I would imagine it’s in the thousands, the low thousands. And then on the other side, you have massive hedge funds and institutions whose bet size is more in the millions, or tens, or even hundreds of millions. And then, of course, on one side, you’ve got Reddit. On the other side, you’ve got mainstream media. That sounds pretty David and Goliath to me.

kara swisher

Right. But it sounds David and Goliath. But among the most traded stocks, there were billions of dollars moving. And this is not “a million little guys shoring up their stimulus checks,” as one hedge fund manager badly, badly reading the room said. Big money is fueling the frenzy.

steve huffman

Oh, well, hedge fund warfare is not a new thing. And I have no doubt that big bettors are getting involved, that big bettors are following the Wall Street bettors. I think big bettors are probably taking the other side as well. And this has gone beyond WallStreetBets. Now, I’m just hearing about friends who don’t hang out on WallStreetBets, who don’t normally invest curious about what’s going on. It’s turned into this — you see celebrities tweeting about it. It seems to have kind of captured folks’ imaginations. So I can’t imagine other hedge funds who weren’t involved in this in the beginning are just sitting on their hands.

kara swisher

Right. They aren’t. So BlackRock possibly raked in $2 billion from its GameStop position. Silver Lake gained over 200 million on AMC. And we’ll get into the issues around influence that they might have. But first, since you just mentioned celebrities, there’s huge cults of personalities and influencers who inspire and mobilize retail investors in this case, as opposed to analysts on Wall Street or hedge fund names. But people like Silicon Valley investor, Chamath Palihapitiya, blogger and Barstool President, Dave Portnoy, and of course, Elon. Do you think individual Redditors are acting autonomously? How do you look at it?

steve huffman

I’m thinking about the word autonomous. If they were really autonomous, absolute individuals not communicating, would they be doing this? I think that’s less likely. I mean, maybe now today because we’re seeing individuals get excited about it. But the community kind of gets these ideas. And so I would call this semi-autonomous. And now, they’re in this position, a prisoner’s dilemma position where they all have to hold for it to work. And if they start selling, the price starts to come down. And we know that is inevitable at some point. So right now, I think, as a community, they’re doing their best to stay together to continue to drive the price up.

kara swisher

In some ways, that’s a great thing. It’s kind of an interesting thing to sort of stick with each other. But I have this feeling that the minute this starts to crumble, first, the professional investors will get right out and take their wins, which many of them have, obviously, because they know how to play this game. Do you worry that these people might be putting themselves in harm’s way, or are you saying that’s just the way it is?

steve huffman

I mean, it’s much more of the latter. If there’s any community that knows what’s about to happen, It’s this community.

kara swisher

Right. So but this community has grown to 6 million recently, which is amazing. And the others are sort of doing research, and you shouldn’t do this, and you shouldn’t do that. It takes nothing into account the emotion of stock owning and day trading, which is a very different, as you said, environment. And when you have all these people sort of egging them on, especially celebrities, especially well-known investors, you can either look at them as sort of the new Warren Buffett or possibly something less good.

steve huffman

Well, I wouldn’t describe anybody here as the new Warren Buffett. He only bets on winners.

kara swisher

Yeah, he does. Yeah, yeah.

steve huffman

And so when he moves, then everybody should — on the other side of the transaction has already lost. So nevertheless, look, it’s a precarious position. And that’s what a short squeeze is for everybody. It creates a lot of big winners. And through the magic of our economy or the financial system, a lot of big losers. And that is going to happen. And that’s a gamble that people are taking.

kara swisher

I want to keep on pushing on this idea of WallStreetBets as a free form for individuals because it’s really interesting. The community offers FAQs and glossaries. It has future guides, options trading guides, brokerage guides and tips like these other sites. It’s an educational resource and financial advisor of sort inviting people who spend their life savings without training and regulation you expect financial advisors to have. There are these clearly articulate motivations, including moving the market to squeeze short sellers and hedge funds. Does any of this trouble you, this idea that there’s sort of — it’s a sea of people who aren’t as financially literate, or is the argument being how smart are the Wall Street people? They’re just sort of taking advantage of things.

steve huffman

I like the latter argument.

kara swisher

Why is that?

steve huffman

Because —

kara swisher

Make the case that you could be worried for some of these people.

steve huffman

Well, I am worried for them. But I wouldn’t let that extend to paternal action like protecting them or preventing them from doing so. The way our financial markets work right now is people make these huge bets. They often do it within the safety of a hedge fund, betting other people’s money. But it’s just as lucrative and irresponsible as what these individuals are doing. And what they are saying is don’t exclude us from this. We get to participate, too.

kara swisher

In the casino aspect of it?

steve huffman

Sure. And just like in a casino, you can be sophisticated, or you can be a sucker. And I don’t think it’s fair to exclude people on that, on the basis of intelligence or knowledge because I don’t think there’s an intelligence or knowledge gap here. I think there’s a resources gap.

kara swisher

Right. What if they can’t handle the losses? When this rally ends, there’s going to be a lot of people holding the bag. And I’m suspecting it, they’re going to be a lot of retail investors.

steve huffman

Hey, look, I would be worried if people were jumping off a cliff into a river as well. It is a fundamentally dangerous activity. But I also think people are free to make decisions. And they’re free to make financial decisions. And people make financial decisions or bets all the time. That is an unfortunate side effect of investing. On the other side, however, investing is how people create wealth in this country. And I think that opportunity should be accessible to everybody.

kara swisher

But you were talking about jumping off a cliff with your friends, which is fun, presumably. And you have bungee cords, et cetera, all the things you’re supposed to do or perhaps not. There is some safety in that. Do you feel any responsibility for the safety of these investors? Do you feel any sense that you have to put gates in place or give more information?

steve huffman

I’m not even sure what gates we would put in place. I think where things get really challenging is when folks are allowed to make these bets on margin on credit with money they don’t have. Now, we are not a bank. We are not a lender. And if I was a bank, or I was a lender in that way, and you said, “Steve, do you have responsibility here?” I would say yes. But we are a forum. And we’re a forum for people to share this news, to share this education, to share the reality of what happens. And honestly, I think WallStreetBets does a really good job showing how dangerous options investing can be because in my history of watching that community, most of them lose money. And that’s a trade-off they do willingly for that sense of community and fun. And there are a lot of ways of turning money into fun. And this community likes to do this in the options markets.

kara swisher

Do you feel you’ll get blame from the community if, at the end of this, they are left holding the bag?

steve huffman

No, I think this community knows exactly what they’re doing. They are not dumb. They are not stupid. They are not foolish. This is not their first rodeo. I hope the little guys come out on top here. But that’s as a rooting interest, as a civilian.

kara swisher

As a civilian, but not that you have to put anything in place to help them.

steve huffman

Well, look, I’m not a sophisticated investor in this way. I actually don’t know how much I can help them. I have spent time on WallStreetBets. I have tried to understand their trades. And I said, you know what? This is too complex for me. So I believe they know what they’re doing. I believe they know the risks they are taking. And I believe this sense of unity they are creating for themselves is as important or even more important than the money they’re putting down.

kara swisher

OK, but unlike billionaire Point72 hedge fund funder and Mets owner, Steve Cohen, individual investors in the Reddit community may not be able to absorb the loss. So you think it’s just that they know what they’re doing going in?

steve huffman

That is a decision they are free to make in the United States.

kara swisher

All right, did you buy any GME? Were you in there?

steve huffman

No, like I said, it’s too complex for me. I’m not a day trader. My financial future is 99.9% Reddit. So with my dollars, I’m the R investing crowd, straight down the middle, very conservative.

kara swisher

All right, so one of the other areas I want to talk about is this sort of ethical considerations, again, and legal concerns for Reddit. Is it possible that big hedge funds actually have a hand in subreddits like WallStreetBets, that they’re using the forces of the masses to engineer and profit off trades? Is there any role that you have in figuring that out, given the anonymous of so many of the people there and fantastic names by many of them?

steve huffman

Well, I have no doubt that they are users of Reddit and maybe willing participants in this community. Now, where we would have a problem is if they are manipulating these communities. We do put a fair amount of effort at Reddit in preventing any sort of manipulation, whether it be around politics and misinformation, or in this case, stocks on WallStreetBets, or for the entire history of Reddit, any self-promoter trying to get a few views. So this is not a new problem for us. And it’s something that we do take seriously and do do our best to prevent.

kara swisher

All right, let me read a tweet from Alex Stamos, who used to work at Facebook. I think you know him. “The WallStreetBets manipulation of GameStop is now the best template for how one could monetize and influence operation. I don’t know if any laws were broken this time. But Reddit now has a problem. It is home for a community of hundreds of thousands of people who have demonstrated the ability to move billions of dollars based on the urging of, at most, a couple of dozen anonymous accounts. Reddit has some thoughtful policy people thinking through these issues. But I’m not sure they have a dedicated influence ops focused investigation team like Twitter or Facebook. If they leave WSB up, they will need one.”

steve huffman

OK, thank you for the free advice, Alex. [LAUGHS] We will go back to doing our jobs. We’ve been working on this for a long time. I would make the exact same criticism of CNBC, of any financial newsletter. That is how the game is played. People have their theories. They have their desires. They have stocks that they’re pushing. They go on TV. They go on newsletters. They write newsletters. They go on forums. And the advice that I think any savvy investor would give, the advice that Warren Buffett would give, for example, is do your own work. Do your own research. And if you don’t do your own work, you are investing at your own risk, at your own peril. And most investors — I know a lot of investors, not just the WallStreetBets types, not just my friends, VCs, institutions, late stage, they’re all lemmings. So some of them, the smart ones, they do their own work. Most of them do not.

kara swisher

OK.

steve huffman

That’s just the way it is.

kara swisher

So CNBC is just as culpable in a situation like this?

steve huffman

Oh, of course.

kara swisher

So what do you actually do? I mean, you can’t — you aren’t running CNBC. Someone else is. Would you want to say, “We’re on the same kind of situation as they are,” in that case?

steve huffman

Well, no, we’re not a publisher. The difference here — and this is, of course, a big conversation, it’s the change in how media works or the evolution. And so we’ve got the mainstream institutional media. We’ve got user-powered platforms. And so I, Steve, we, Reddit, Inc., are not the publisher. We don’t have an opinion here. Our users do have a voice. And they create that voice. And in the same way that media shares information, shines a light on things, tell stories, our users do that as well. But they are doing that on their own without editors, without gatekeepers. And that’s kind of the whole point.

kara swisher

But do you feel like you have some responsibility, given the anonymous nature? You can see who’s doing it, if it’s a Bill Ackman, or a Dan Loeb, or whoever is touting those stocks one way or the other. They have dozens and dozens and dozens of people doing that. What do you do around the market manipulation, the illegal stuff? What is your efforts?

steve huffman

Well, it’s the SEC’s job to prevent market manipulation. And they write the rules. And then everybody else operates according to those rules, more or less. You and I both know that these rules are really fuzzy and I think inefficient. So it is perfectly legal for people to talk about stocks, to make recommendations, to share what they’re doing, to share what they’re thinking, to egg each other on. That’s not manipulation. That’s just talking.

kara swisher

So you feel that if there are people on there trying to manipulate the market, you are chasing them down is not your job?

steve huffman

If we’re talking about on Reddit, people talking about stocks, that is not manipulating the market. Manipulating the market is when — honestly, I’m actually not going to answer that question because I don’t know how to manipulate the market.

kara swisher

OK.

steve huffman

I just know that talking about stocks is not that.

kara swisher

OK, all right, well, they certainly can’t because there’s certain — there’s some people that really do. And you don’t know who they are, in that case. The anonymity is probably a problem in your argument in that you don’t know who they are.

steve huffman

Yeah, but on Reddit, they start at zero. They have to earn their influence. And on Reddit, the influence is earned through the upvoting and downvoting. And the credibility in a community like WallStreetBets is earned by showing your moves. And this is, quite often, literally screenshots. And so WallStreetBets is far more transparent than the average hedge fund. So one thing I think would be interesting to look at from a regulatory point of view is should hedge funds have to reveal all of their positions. Because what we don’t know in all of this is who’s taking the other sides of these bets. We know some of these firms have massive short positions. It would be foolish to think that other people aren’t taking the other side of that and taking these really aggressive long positions. And then on top of that, other hedge funds are probably taking new short positions.

kara swisher

So we don’t know what they’re doing.

steve huffman

We don’t know any of that. At least on WallStreetBets, you can see that. You can see on the screenshots.

kara swisher

But some popular posts on WallStreetBets include some very explicit intentions to move the market. Are you worried about that?

steve huffman

My understanding is people talking about their moves is perfectly legal and entirely common. We will leave it to the regulators to decide whether anything has crossed the line.

kara swisher

Have you been contacted by the SEC at all in this? Because they’re obviously looking at every part of it. And you’re a big part of it.

steve huffman

Yeah, if and when they contact us, I would not be able to disclose that.

kara swisher

OK, if and when. So they have not? Is that a have not?

steve huffman

If and when they contact us, I would not be able to disclose that.

kara swisher

OK, all right, have you spoken to the CEO of Robinhood at all?

steve huffman

No.

kara swisher

You’re just part of the ecosystem, essentially.

steve huffman

I mean, look, our attention the last week has been keeping Reddit up. We are seeing a massive influx of traffic and highly targeted traffic, which is always a little bit of a challenge for us. So our infer team is working around the clock to keep things going. Our community team is working around the clock to keep the moderators sane and bring them help. And the moderators are working around the clock to keep their community running. So that’s where our attention is.

kara swisher

And being able to talk to each other in a transparent way. Do you, at all, fear a civil lawsuit from a short seller, for example? Is that something? Or does 230 protect you, section 230?

steve huffman

230 was created in the wake of a stock trading forum, so —

kara swisher

Indeed, it was.

steve huffman

—I think we’re well protected there. Now, it doesn’t mean we won’t see the lawsuit. But then I would expect that 230 would be the shield.

kara swisher

The shield. This is a law that was passed many, many years ago to give immunity to platforms.

steve huffman

But actually, I think this is a great example of 230 where it’s like, you’ve got a big hedge fund with unlimited funds. They can’t come after the little guy. So they come after the next best thing, which would be somebody like us. And our role is to protect and empower the little guy. And so I think 230 serves an incredibly valuable purpose in allowing us to do so. [MUSIC PLAYING]

man

(SINGING) Sway.

kara swisher

We’ll be back in a minute.

If you like this interview and want to hear others, hit subscribe. You’ll be able to catch up on “Sway” episodes you may have missed like my conversation with Substack CEO Chris Best. And you’ll get new ones delivered directly to you. More with Steve Huffman after the break. [MUSIC PLAYING]

All right, let’s get into content moderation in general. You’ve been dealing with this for a long time, as you’ve said. And there had been problems on WallStreetBets, including Jaime Rogozinski, the founder of the subreddit and one of its moderators until last year. And he left. Talk a little bit about that because in this case, Mr. Rogozinski said in a, I think, a Wall Street Journal article that he received a call from Citron Research founder, Andrew Left, one of the short sellers who’d been betting against GameStop. Mr. Left told Mr. Rogozinski he’d been attacked by angry investors on social media and even his children had been targeted. Is this something that’s a concern to you? Because this is not necessarily openly talking about stocks but actually being the dangerous part of it, or the angry part of it, or the hateful or racist, et cetera.

steve huffman

Harassment is not allowed on Reddit. And if that is happening on Reddit, that would be a concern for me. And we would do our best to put an end to that. Now, I’ve heard those accusations. And it is a common accusation to make towards platforms when you’re upset with them. And to my knowledge, we have not seen any evidence of that.

kara swisher

So you don’t believe Mr. Left?

steve huffman

I would love to see what he’s seeing so that we can deal with it. That would be my ask.

kara swisher

So you feel you have responsibility if there was that content?

steve huffman

Yes, we do not want to be a nexus or ground zero for that sort of bad behavior. We have put a lot of effort into that. And we will continue to do so.

kara swisher

All right, so you have been actually ahead of the curve on content moderation in many ways. You personally took issue with right-wing extremists on Reddit in early 2015 when you returned to the company. You quarantined the Donald subreddit in 2019 and banned it by 2020. How do you translate that experience into what’s happening on WallStreetBets and what’s happening to this site in general?

steve huffman

In WallStreetBets, they are operating within our content policy. They are not perfect. I know we’ve had issues. We’ve had to take stuff down in the past. And I wouldn’t be surprised if we have issues in the future. But what’s most important for us is whether a community on Reddit — because of our moderation strategy, we do expect and depend on our communities to hold to a reasonable standard. And our conversations with the WallStreetBets leadership has suggested that they are, to the best of their abilities, trying to do so. And so when we have that sort of relationship, then we will also work with them to help them do so. Communities like the Donald, it was actually the opposite. It was malicious compliance. They never really wanted to —

kara swisher

What is malicious compliance? What does that mean?

steve huffman

It’s — I wish I could think of a funny example off the top of my head. It’s complying with the letter of the law but not the spirit of the law. It’s people wearing their masks but their nose is sticking out or whatever. And they do this in real life and online to deliberately antagonize. I don’t know. It’s the quality of people that I probably like least. And so one of our learnings over the last few years is we spend a lot of energy on people who don’t really want to be a part of Reddit. And I don’t think that’s energy well spent. But we are more than happy to spend energy on communities that might be in a difficult position, might be around a challenging topic, and are willing to work with us to make it work.

kara swisher

All right, so WallStreetBets was briefly made private Wednesday. And a GameStop thread was locked. Did Reddit ask the moderators to take these actions? And I know the WallStreetBets moderator said it was due to an influx of comments as the subreddit acquired millions of new followers while they developed the software to read and reply comments. They say Reddit did not allow them to special access to read and reply to the new Reddit feed.

steve huffman

Yeah, so to the best of my knowledge, what happened there is a couple of things. So the moderators are doing the best they could, but were overwhelmed. And the influx of New users was tripping all of our rate limits and protections. So my understanding is the mods were not able to use our API to do their jobs because our API was basically shutting everything down because it looked fishy. So the mods took it private. We got in contact with them. We solved the issues. And so we have since fixed those issues. We worked with the mods to bring the community back up to find them more help. And we’re continuing to monitor it. So I don’t think anybody did anything wrong there. It was just a challenging situation that we had to work through.

kara swisher

So in this case, we were talking about working with them, not malicious intent. You never had thought about quarantining the page or slowing it down in any way, like the warning you did on the Donald subreddit back in 2019?

steve huffman

No, we may have. But I actually don’t know specifically. We may have reached out to the mods in the past and with warnings or advice, which we often do. That’s what our community team does is tries to get ahead of —

kara swisher

Such as hateful content and harassment, that kind of stuff.

steve huffman

Exactly.

kara swisher

Your community is very outspoken. But did you fear a backlash from this community? This has been an important part of Reddit.

steve huffman

We don’t make decisions factoring in backlash because if we did, then we wouldn’t do anything. Now, the freedom we have at Reddit is we have been through the wringer on everything many times. So I have spent days multiple times being labeled as America’s number one racist, which is a very painful position to be in. And yet, we make it through those moments. And I think what the lesson I’ve learned from Reddit, actually overall, is that people are better than we give them credit for. It’s easy to be very cynical about your fellow human beings in this climate, certainly in the climate over the last four or five years. But what I’ve seen from Reddit is that people are more interesting, and funny, and collaborative, and supportive than I think we generally give them credit for. But I also think that people get caught up. And I think they say things to be deliberately antagonistic to identify with their tribe.

kara swisher

You, in particular, have had that problem and had to deal with it by banning a lot of these sites. And you were — let me give you credit. You were much more aggressive than a Facebook or a Twitter with far less resources, which is something you talked about with me, is that you don’t have the ability. You don’t have the luxury of all the money you could spend trying to figure out how to use algorithms, or technology, or just man hours to do it.

steve huffman

We do see some of that behavior on Reddit but far less than the other platforms. And I think it’s because of the way Reddit is designed. And I think that’s one of the reasons why Reddit is better in this dimension than the other platforms, even though it’s the same people. Reddit is big enough now that we can’t say our users are some special subset of users. It’s the same people. They behave differently in our platform than other platforms.

kara swisher

But you endured that whole period when you had those, not just the Donald, but some very severely racist platforms.

steve huffman

Yeah, and it challenged us to think, OK, now, there are limits here. And what are those limits? And how can we enforce those limits without compromising our value around openness? And those weren’t easy decisions. What changed is — it started in 2015. We didn’t have the perfect content policy to back it up. But we at least realized, hey, this community is not — they’re not a community. They are rioting, basically. They are trying to hurt us. And we don’t have to tolerate that.

kara swisher

Can you explain for build your business model? Because I think there’s a sort of an idea out there that Reddit makes money off of users and communities dedicated to racism, white supremacy, other forms of extremism. Does your business model reward that kind of extreme behavior? Explain it very briefly, what it is.

steve huffman

Sure, so first, we don’t have that extreme behavior on Reddit anymore. We have had it. I think we’ve done a good job at getting rid of it. There may be blips here or there on a small scale. And we do our best to get ahead of it before it metastasizes into something serious. We are in the ads business, Senator. [LAUGHS] However, advertisers care about where their ads run. And we want our customers, our advertising customers, to have a good experience. So we don’t run ads on much of Reddit. Everywhere we run ads is on our own communities that we human approve that are appropriate for ads. But we’re not in the business of posting that content. And we’re certainly not in the business of monetizing that content.

kara swisher

Right. So and it’s actually probably a hard sell, right? Here, come over here to the —

steve huffman

It’s not a hard sell. It’s an impossible sell.

kara swisher

So in terms of doing that, that advertisers really — did you get a lot of advertisers just saying, clean this up? Do you see that happening more? You saw what happened over at Facebook for a brief New York minute.

steve huffman

We definitely had those conversations with advertisers over the last five years. I think now, actually, we’re getting credit for the work we’re doing here. And it’s something I’ve been saying for a long time is how can you criticize Reddit for brand safety when you’re an advertiser on Twitter or on YouTube?

kara swisher

Fair. It’s a low bar, though, Steve. Come on.

steve huffman

Well, look, I honestly —

kara swisher

Low bar.

steve huffman

— I’m sorry, moving in the right direction. But I think we’re finally with advertisers getting credit for doing a good job on these things.

kara swisher

I would tend to agree with you on that. All right, so the Twitter and Facebook banning Trump, this is something you had done with the Donald previously. What were your thoughts on that?

steve huffman

I thought it was probably the right move. I thought their reasoning could have been tighter. But it’s very easy for me to armchair that because I could say literally the same thing about literally anything that I’ve done. Probably the right move. I think you could have articulated it better. But I think what happened on January 6 was unprecedented. And I think citing that as reasoning is probably a reasonable thing.

kara swisher

OK, where do you see it going? Where do you imagine this content moderation? There’s a lot of pressure of obviously a lot of people on the conservative side say they’re going to do really mean things to tech. I think they are paper tigers, in my opinion. But what do you imagine where this is going to go, the content moderation debate?

steve huffman

You’ll see conservatives say that platforms do too much moderation. And you’ll see Democrats say we do too little, so —

kara swisher

Which is it?

steve huffman

Well, we live in the United States. We’re going to fight it out in the middle. I think both can be true. I think the platforms are not sitting still here. We’ve all learned. We’ve all gotten better. We’ve all made improvements. And I think we all have improvements to make. And I think, honestly, as with many things, regardless of the regulatory change, the real improvement we’re going to see is independent of that. It’s because the platforms like Zuckerberg, Jack, they are values driven people. You can see it when they speak. And I think they will ultimately try to do the right thing for their users and their customers, even though it’s really difficult and even though they may not know the answer yet.

kara swisher

Yeah, I think some are more value driven than you think than others, I would say. I think you’re more value driven than most of them, honestly. I’m paying you a compliment here. But again, low bar. [LAUGHS] So I have —

steve huffman

The perfect Kara compliment, minimal viable compliment.

kara swisher

Minimal viable compliment. Well, at least it’s not — what is it? Did you say maliciously — what was the word?

steve huffman

Maliciously compliant.

kara swisher

I am not maliciously —

steve huffman

There’s a community on Reddit called malicious compliance.

kara swisher

Yeah, I’m going to start one called minimum viable compliment on Reddit. So in some ways, Reddit has a finger on the pulse of what’s going to be the next niche thing to go mainstream like the Donald, WallStreetBets. Do you see anything, what lies ahead, if not more financial tech? Is there anything that you think you see coming forward?

steve huffman

The big sea change I see coming is I think the fulfillment of the promise of the internet. But the promise of the internet has gotten bigger. So when I think about the promise of the internet 20 years ago, when I was a kid, it was about democratizing information, and knowledge, and ultimately, friendship, making the world feel smaller. I think what we’re going to see over the next 20 years is the democratization of economics. So not just what we’re seeing on WallStreetBets. But we’re going to see a new class of traders earning a living, not just the influencers, not just the 1% of creators, but the middle class of creators. I think we’ll probably see the democratization of the banking system right through crypto. And it’s going to take some time to get there. But I think that sort of accessibility is what the internet creates. And I think it’s inevitable.

kara swisher

Ah, interesting. More to come then, more craziness. Steve Cohen’s probably vomiting in his hat, in his Mets hat right now, about what’s happening.

steve huffman

Oh, they will find a way to win. That’s —

kara swisher

They’re going to stay afloat, trust me.

steve huffman

It’s like, they’re not going to be left behind.

kara swisher

Yeah, yeah.

steve huffman

We all know that, for better or for worse.

kara swisher

We absolutely do. Steve, this is really — thank you so much for doing it. But actually, before you go, I have to ask you, the Reddit AMA tradition. You have to answer this question, OK?

steve huffman

OK.

kara swisher

Would you rather fight 100 duck sized horses or one horse sized duck?

steve huffman

OK, I’ll give you my first answer is I am tired of thinking about killing ducks and horses.

kara swisher

Oh, good one.

steve huffman

I have softened in my old age. I just want these animals to get by. So I would try to find 100 duck sized carrots and feed those little horses and hopefully they —

kara swisher

OK, they are going to eat you, Steve. You are so done.

steve huffman

Yeah, maybe, maybe, maybe I’m naive there. I’m just tired of — I’ve spent so much time, honestly, more than any person on Earth thinking about killing large ducks. And I’m just sick of it.

kara swisher

All right, then we will not make you do it further. Steve Huffman, thank you so much.

steve huffman

My pleasure. Thank you for having me. [MUSIC PLAYING]

kara swisher

“Sway” is a production of The New York Times Opinion. It’s produced by Nayeema Raza, Heba Elorbany, Matt Kwong, and Vishaka Darbha. Edited by Paula Szuchman with original music by Isaac Jones. Mixing by Eric Gometz and fact checking by Kate Sinclair. Special Thanks to Shannon Busta, Liriel Higa, and Kathy Tu. If you’re in a podcast app already, you know how to subscribe to a podcast. So subscribe to this one. If you’re listening on The Times website and want to get each new episode of “Sway” delivered to you faster than a finfluencer can move the stock market, download a podcast app like Stitcher or Google podcast, then search for “Sway” and hit subscribe. We release every Monday and Thursday.

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