Selling your Reddit data to pretty much anyone willing to pay, including Wall Street types, has been going on for years. I worked for a company called Socialgist where we did just that.
These days anyone who peels back the curtain on something inconvenient is accused of being a Russian shill. So don’t take my word for it, take it from official press releases written in American:
– Here’s the one about selling your Reddit data: https://www.prnewswire.com/news-releases/socialgist-extends-market-leadership-with-reddit-partnership-300458924.html
– Here’s a collection of other official press releases that celebrate selling your data from other websites: https://socialgist.com/press/
Before I get too deep into the what how and why, here’s a non-exhaustive list of data sources we sold at one point or another:
– Stock Twits
– Disqus comments
– A package of probably the biggest collection of mom and pop/enthusiast blogs
We had contracts with some of those websites (including Reddit) which gave us explicit permission to go out and sell their users’ data. We would then split the revenue from the sale of your data with Reddit. With some of the other platforms, we didn’t have contracts with them so we scraped them and hoped they didn’t catch us or didn’t care.
We scrubbed your PII (Personally Identifiable Information) before giving your data away, so we were left with the content of the post and comments, along with metadata like upvotes, dates, and sub-comments.
This is how it would work:
1- Hedge Funds buy Reddit data through Socialgist
2- They put in alerts for key words for their stock positions like “Nokia” or “Black Berry”, where they get notified whenever someone posts about it. Kind of like Google Alerts.
a. And no, using codewords for these stocks doesn’t work because these people have more money than God and they have language processing engines that’ll decode that in 2 seconds.
3- Your post encouraging fellow Redditors to pump a heavily shorted stock like Nokia gets a lot of traction!
4- Hedge Funds can now take 20 different approaches to still profit. Here are some examples:
a. Sell their short positions very early on before incurring much losses, and buy Nokia stocks as it goes up.
b. Keep their short positions and buy Nokia stocks to hedge against their short positions.
c. Call up Robinhood and other trading platforms and tell them that it looks like Nokia might pump and they better not allow trades on that stock.
d. Call up Reddit and threaten them to “regulate” these comments or else they’ll stop buying their data and encourage advertisers (who are often hedge fund customers) to shy away from advertising on Reddit.
e. Conduct a disinformation campaign on why buying Nokia stocks is a terrible idea before the movement gains any traction
So why were the peasants able to pull off the Game Stop pump if Hedge Funds can do all this?
The simplified answer is arrogance. They didn’t think any of this was possible.
The more technical answer is that because they were arrogant, many of the hedge funds scraped Reddit themselves instead of going through Socialgist. Scraping gets you the data you need, but at a much slower rate; i.e. you don’t get the data in real time.
But because Reddit PUSHES the data to Socialgist and its customers rather than the customers having to PULL it, people who buy Reddit data through Socialgist can get real time data, which is important for stock trading in a volatile market.
I would put money that Socialgist is getting a lot of calls from hedge funds today.
The only reason we got away with the Game Stop pump is because we caught Wall Street sleeping. But they’re definitely paying attention now, and any of them can pay a teeny tiny fraction of what their losses could be to gain access to every single comment on Reddit and many other major platforms in real time.
So we have 2 options.
1- Say fuck Reddit (+ the other ones listed above), and move to platforms that explicitly state in their Terms of Service that they will never sell your data under any circumstances
2- Petition Reddit to stop selling our data, because without us, their users, they’re nothing.
It’s been inspiring to see money flow from Wall Street to Main Street for the first time in history. I wrote this article because I would hate the see this momentum die because I kept my mouth shut. So please share this article or information with as many people as possible.
Thanks for reading.
Founder – MBS (Monkey Brain Sports)