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]
Shamis & Gentile, P.A. Notifies Investors It Has Filed a Complaint to Recover Losses Suffered by Purchasers of Reddit, Inc. Securities and Sets a Lead Plaintiff Deadline of August 18, 2025