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].
REDDIT ALERT: Bragar Eagel & Squire, P.C. Announces that a Class Action Lawsuit Has Been Filed Against Reddit, Inc. and Encourages Investors to Contact the Firm