Core Viewpoint - A class action lawsuit has been filed against Reddit, Inc. for allegedly misleading investors regarding its user growth and advertising revenue, particularly in light of changes to Google's search algorithm that negatively impacted Reddit's traffic [3][4]. Group 1: Class Action Details - The class action represents investors who purchased Reddit securities between October 29, 2024, and May 20, 2025, with a deadline of August 18, 2025, to file a lead plaintiff motion [1]. - The Portnoy Law Firm is offering complimentary case evaluations to affected investors [2]. Group 2: Allegations Against Reddit - The lawsuit claims that Reddit made false statements and failed to disclose that changes to Google Search's algorithm were significantly reducing user click-throughs to Reddit [3]. - It is alleged that the increase in searches for "Reddit" did not indicate genuine user intent to visit the site, as users were finding answers directly on Google [3]. - The complaint states that these changes led to a significant drop in traffic that Reddit could not quickly offset, undermining its guidance on user growth and advertising revenue [3]. Group 3: Financial Impact and Analyst Reactions - On May 1, 2025, Reddit reported its Q1 2025 financial results, revealing a third consecutive quarter of slowing daily active user growth, which caused a decline in its stock price [4]. - Following this, Wells Fargo analysts downgraded Reddit's stock and lowered their price target to $115, citing Google's AI features as a potential permanent disruption to Reddit's user traffic [4]. - On May 21, 2025, Baird analysts also downgraded Reddit's stock, cutting their price target to $120 due to ongoing user growth challenges, resulting in a stock decline of over 9% [5].
Reddit, Inc. Investors: Please contact the Portnoy Law Firm to recover your losses. August 18, 2025 Deadline to file Lead Plaintiff Motion.