Core Viewpoint - A lawsuit has been filed against Reddit, Inc. and its senior executives for potential violations of federal securities laws, specifically related to misrepresentations about user growth impacted by Google's AI technology [1][2][3]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, titled Tamraz, Jr. v. Reddit, Inc., et al., No. 25-cv-05144 [2]. - Investors have until August 18, 2025, to request to lead the case [2]. Group 2: Allegations Against Reddit - The complaint alleges that Reddit downplayed the negative impact of Google's AI on its user growth, which has been significant as users can find answers directly through Google without visiting Reddit [3][4]. - The lawsuit claims violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors who purchased Reddit securities [2]. Group 3: Stock Performance - On May 1, 2025, Reddit reported a slowdown in daily active user growth, leading to a stock price decline of $4.96, or over 4%, from $118.79 to $113.83 per share [5]. - Following an analyst downgrade on May 21, 2025, due to concerns over Google's AI capabilities, Reddit's stock fell by $9.79, or over 9%, from $105.64 to $95.85 per share [6].

Core Insights - Reddit's stock experienced a 19.4% increase for the week, attributed to the launch of new AI-powered advertising tools and positive analyst commentary [1][5] Advertising Tools Launch - At the Cannes Lions festival, Reddit introduced Reddit Community Intelligence, which analyzes over 22 million posts to provide insights for advertisers [3] - The company launched two new products: Reddit Insights, an AI-powered social listening tool for marketers, and Conversation Summary Add-ons, which enhance ad placement by integrating positive user content [3][4] Revenue and Market Position - Advertising remains Reddit's primary revenue source, although the company has faced challenges in monetizing its platform compared to larger social media competitors [4] - The recent stock increase was also influenced by B. Riley's commentary on Meta's $14.3 billion investment in Scale AI, suggesting a positive outlook for the value of content on Reddit's platform [5] Future Outlook - The introduction of AI advertising tools is seen as a crucial step for Reddit to sustain its growth in user engagement and advertising revenue, which could further elevate the stock's performance [6]

Core Viewpoint - A securities class action lawsuit has been filed against Reddit, Inc. for failing to disclose significant changes in Google Search's algorithm that adversely affected user traffic and advertising revenues during the class period from October 29, 2024, to May 20, 2025 [1][2]. Group 1: Allegations of the Complaint - The complaint alleges that Reddit's management did not disclose that changes in Google Search's algorithm, including new AI features, were causing users to stop their queries on Google Search, leading to reduced traffic to Reddit [2]. - It is claimed that the management was aware that the increase in the search term "Reddit" was due to users finding answers directly on Google Search, rather than intending to visit Reddit [2]. - The complaint states that the zero-click search phenomenon was significantly reducing traffic to Reddit, which the company could not overcome in the short term [2]. - As a result, the complaint alleges that the company's public statements regarding user rates and advertising revenues were materially false and misleading [2]. Group 2: Analyst Downgrades and Stock Price Impact - On May 19, 2025, Wells Fargo analysts downgraded Reddit's stock, lowering the price target from $168 to $115 per share, citing that new AI features in Google Search would likely cause permanent disruptions to user traffic [3]. - Following the Wells Fargo downgrade, Reddit's stock price fell from $113.23 on May 16, 2025, to $107.99 on May 19, 2025, representing a decline of approximately 4.2% [4]. - On May 21, 2025, Baird analysts also downgraded Reddit's stock, reducing the price target from $140 to $120 per share, echoing concerns about the impact of Google Search's new developments on Reddit's traffic [5]. - After the Baird downgrade, Reddit's stock price dropped from $105.64 on May 20, 2025, to $95.85 on May 21, 2025, a decline of about 9.3% [5].

Core Viewpoint - A class action lawsuit has been filed against Reddit, Inc. due to alleged misleading statements regarding user traffic and advertising revenue, particularly in light of changes in Google Search's algorithm and AI features [1][3]. Group 1: Lawsuit Details - The lawsuit is on behalf of individuals and entities that purchased Reddit securities between October 29, 2024, and May 20, 2025, with a deadline of August 18, 2025, for lead plaintiff applications [1]. - The complaint claims that Reddit's user traffic was significantly impacted by changes in Google Search, which began implementing new AI capabilities that altered search results [2]. Group 2: Allegations Against Reddit - Defendants are accused of failing to disclose that changes in Google Search's algorithm were causing users to stop their queries on Reddit, leading to a decline in traffic [3]. - It is alleged that the increase in searches for "Reddit" was due to users finding answers directly on Google, rather than intending to visit Reddit, resulting in a "zero-click search" phenomenon that adversely affected Reddit's traffic [3]. Group 3: Financial Impact - On May 1, 2025, Reddit reported three consecutive quarters of deceleration in daily active user growth, causing its stock price to drop by $4.96, or 4.2%, from $118.79 to $113.83 per share [4]. - Following a downgrade by Wells Fargo on May 19, 2025, which cited permanent disruptions from Google Search's new AI features, Reddit's stock fell by $5.24, or 4.6%, from $113.23 to $107.99 per share [5]. - On May 21, 2025, Baird analysts further downgraded Reddit's stock, leading to a decline of $9.79, or 9.3%, from $105.64 to $95.85 per share [6][7].

Group 1 - A class action has been filed against Reddit, Inc. on behalf of investors who purchased securities between October 29, 2024, and May 20, 2025 [1] - The allegations include that Reddit misled investors about reduced user traffic due to changes in Google Search's algorithm and features, which led to a significant decline in traffic to the Reddit website [2] - The complaint states that the defendants were aware that increased search queries for "Reddit" were due to users finding answers directly on Google, rather than intending to visit Reddit, which contributed to the misleading public statements [2] Group 2 - Shareholders may be eligible to participate in the class action and can contact Robbins LLP for more information on serving as lead plaintiff [3] - The representation in the class action is on a contingency fee basis, meaning shareholders will not incur fees or expenses [4] - Robbins LLP has been dedicated to helping shareholders recover losses and improve corporate governance since 2002 [4]

Core Viewpoint - A lawsuit has been filed against Reddit, Inc. and its senior executives for potential violations of federal securities laws, specifically related to misrepresentations about user growth impacted by Google's AI technology [1][2][3]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, titled Tamraz, Jr. v. Reddit, Inc., et al., No. 25-cv-05144 [2]. - Investors have until August 18, 2025, to request to lead the case [2]. Group 2: Allegations Against Reddit - The complaint alleges that Reddit downplayed the negative impact of Google's AI on its user growth, which has been significant as users can find answers directly through Google without visiting Reddit [3][4]. - Reddit's user growth was reportedly affected as Google's AI search results reduced the need for users to engage with Reddit's platform [4]. Group 3: Stock Performance - Following a report on May 1, 2025, indicating a slowdown in daily active user growth, Reddit's stock price fell by $4.96, or over 4%, from $118.79 to $113.83 per share [5]. - On May 21, 2025, an analyst from Baird lowered the stock price target due to concerns over Google's AI, leading to a further decline of $9.79, or over 9%, from $105.64 to $95.85 per share [6].

Core Viewpoint - A class action lawsuit has been filed against Reddit, Inc. for alleged securities fraud, impacting investors who purchased Reddit securities between October 29, 2024, and May 20, 2025 [1] Company Performance - Reddit's primary revenue source is advertising, and it has been experiencing a decline in user traffic due to changes in Google Search's algorithm, particularly the introduction of AI features [4] - The company reported three consecutive quarters of deceleration in daily active user growth, leading to a significant drop in stock price following the earnings release on May 1, 2025 [6] Stock Price Movements - Following the earnings announcement on May 1, 2025, Reddit's stock fell by $4.96, or 4.2%, from $118.79 to $113.83 [6] - On May 19, 2025, Wells Fargo analysts downgraded Reddit's stock, resulting in a further decline of $5.24, or 4.6%, from $113.23 to $107.99 [7] - Baird analysts also downgraded Reddit's stock on May 21, 2025, causing a drop of $9.79, or 9.3%, from $105.64 to $95.85 [8][9] Legal Proceedings - The lawsuit alleges that Reddit's management made false and misleading statements regarding user traffic and advertising revenue, failing to disclose the impact of Google Search's algorithm changes [5] - Investors affected by the alleged fraud have until August 18, 2025, to request to be appointed as lead plaintiff in the class action [9]

Core Insights - Reddit (RDDT) is enhancing its advertising business by leveraging real-time community engagement to provide strategic insights for brands, gaining traction among advertisers seeking authenticity and scale [1][4]. Advertising Business Development - Reddit launched Community Intelligence, a suite that allows marketers to monitor live conversations across subreddits, analyze sentiment, and optimize campaign decisions, transforming the platform into a dynamic planning engine [2]. - In Q1 2025, Reddit's advertising revenue reached $358.6 million, a 61% increase year-over-year, with performance campaigns making up 60% of total ad spend, indicating strong growth among mid- and lower-funnel advertisers [4][10]. User Engagement Metrics - User engagement on Reddit is robust, with Weekly Active Users at 401 million and Daily Active Uniques at 108 million, both reflecting a 31% year-over-year increase, which is a key driver for advertising growth [3][10]. Competitive Landscape - Reddit faces significant competition from Alphabet (GOOGL) and Meta Platforms (META), both enhancing their AI-driven advertising capabilities. Alphabet's Google Ads and YouTube offer large-scale performance marketing, while Meta strengthens its advertising tools across its platforms [6][7]. Valuation and Market Performance - Reddit's stock has declined 18.1% year-to-date, contrasting with a 1.6% return for the broader Zacks Computer & Technology sector and a 13% increase in the Zacks Internet - Software industry [8]. - The forward 12-month Price/Sales ratio for Reddit is 11.8X, significantly higher than the sector average of 6.36X, indicating a premium valuation [12]. Earnings Estimates - The Zacks Consensus Estimate for Q2 2025 earnings is 19 cents per share, an improvement from a loss of 6 cents per share in the same quarter last year. For fiscal 2025, the earnings estimate is $1.21 per share, up from a loss of $3.33 per share in fiscal 2024 [15].

Core Insights - Reddit (RDDT) shares closed at $133.84, which is 41.9% below its 52-week high of $230.41 reached on February 10, 2025, and have dropped 18.1% year to date (YTD) [1][2][8] - The company has faced challenges from macroeconomic conditions, higher tariffs affecting discretionary spending, and increased competition from Snap and Nextdoor [2][4] - Despite these challenges, Reddit's Q1 2025 results showed a revenue increase of 61% year over year to $392.36 million, surpassing estimates [4][5][11] Stock Performance - Reddit shares have rebounded 12.7% since May 1, 2025, outperforming Snap and Nextdoor, which declined 24% and 31.6% YTD, respectively [2][4] - The stock is currently trading at a price-to-sales (P/S) ratio of 11.8X, significantly higher than the industry average of 5.57X and competitors Snap (2.24X) and Nextdoor (2.42X) [6][8] User Engagement and Revenue Growth - Daily and weekly active users increased by 31% year over year, contributing to a 61% growth in advertising revenues to $358.6 million [5][11] - The Zacks Consensus Estimate for Q2 2025 revenues is between $410 million and $430 million, indicating a potential growth of 51.61% year over year [11] Product Development and Partnerships - Reddit is enhancing its advertising platform with AI-powered tools and has launched new features like Dynamic Product Ads and Reddit Community Intelligence [12][14] - Collaborations with major companies like Alphabet and Microsoft are expected to drive innovation and improve measurement tools [15][16] Market Position and Outlook - Reddit's growing product suite and user engagement suggest long-term potential, although the stock is currently trading at a premium [16][18] - The company holds a Zacks Rank 3 (Hold), indicating a cautious approach for investors amid market uncertainties [18]

NEW YORK, June 18, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of  Reddit, Inc. (“Reddit” or the “Company”) (NYSE: RDDT).  Such investors are advised to contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980, ext. 7980. The investigation concerns whether Reddit and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.  [Click here for information about joining the class action] On May 21, 2025, Wall ...